How Much Overlap is There Between the Trump and Obama Budgets?
We noted last year that President Obama's final budget might not be as much of a dead letter as many observers assumed. Though there was likely to be little action on the major proposals in the budget in an election year, we pointed out that several proposals in President Bush's final budget were either enacted or still proposed in the final Obama budget. With President Trump's first budget out, we can see that some Obama proposals continued in the Trump budget. In total, mandatory spending policies that are similar or identical to ones from the final Obama budget make up $200 billion of the ten-year savings in the Trump budget, and a few other Obama policies from earlier budgets made up an additional $75 billion. As for changes in discretionary spending, the Trump budget makes cuts in programs that the Obama budget targeted totaling $13 billion in 2018.
Not surprisingly, the budgets from Presidents Obama and Trump are different in many respects. While President Obama reduced deficits entirely through tax increases and included net spending increases, President Trump did so entirely through spending cuts. In addition, while the Obama spending cuts were largely concentrated in Medicare, the Trump cuts mostly hit non-Medicare health care programs and non-defense discretionary spending, both areas that the Obama budget increased.
Still, several policies overlap (or are very similar) between the two budgets. The largest policy that overlaps is the consolidation of income-based repayment plans for student loans into a single program. Though the details differ slightly on the percent of income borrowers would pay and the period after which debt would be forgiven, both budgets would save tens of billions with this policy change—$76 billion over ten years in the case of Trump's budget. Other major policies where the budgets overlap include reforming the Postal Service ($46 billion in Trump's budget), reducing farm subsidies (the Trump budget would save somewhat more at $38 billion), and increasing Pension Benefit Guaranty Corporation (PBGC) premiums ($16 billion). In total, policies that overlap would save $200 billion over ten years in President Trump's budget, or 6 percent of the non-interest savings the budget claims.
The Trump budget also adopts two policies from previous Obama budgets (both as recent as FY 2014) that were dropped before the final budget. The first would offset disability benefits for those who also receive unemployment benefits. The second would increase federal employee retirement contributions. The latter policy was partially enacted in the 2013 budget agreement, but the Trump budget's increase would go much further. Together, these two policies save an additional $75 billion in the Trump budget, meaning that all overlapping policies save $275 billion, or 8 percent of the Trump budget's non-interest savings.
Ten-Year Savings From Overlapping Policies in President's Budgets
|Policy||Trump Budget Savings||Obama Budget Savings|
|Consolidate income-based repayment plans into a single program||$76 billion||$49 billion|
|Reform Postal Service||$46 billion||$38 billion|
|Reduce farm subsidies||$38 billion||$18 billion|
|Increase PBGC premiums to ensure solvency||$16 billion||$16 billion|
|Enact user fees for food safety, animal and plant health, and grain inspections||$6 billion||$1 billion|
|Fund Reemployment Services and Eligibility Assessments||$4 billion||$2 billion|
|Enact Spectrum License User Fee||$4 billion||$5 billion|
|Extend round-down of cost-of-living adjustments for veterans' benefits||$3 billion||$2 billion|
|Improve unemployment insurance program integrity||$2 billion||$1 billion|
|Take several steps to reduce improper payments||$2 billion||$2 billion|
|Establish user fee to fund inland waterways||$1 billion||$1 billion|
|Strengthen Child Support Enforcement||$1 billion||$1 billion|
|Cap benefits for Post-9/11 GI Bill flight training||$1 billion||$1 billion|
|Increase TRICARE pharmacy co-pays||-$1 billion*||-$0.1 billion*|
|Increase customs fees||$0.4 billion||$1 billion|
|Other policies||$0.1 billion||$0.1 billion|
|Subtotal, Final Obama Budget Policies||$200 billion||$137 billion|
|Increase federal employee retirement contributions||$72 billion||$20 billion|
|Offset overlapping unemployment and disability insurance benefits||$3 billion||$1 billion|
|Subtotal, Previous Obama Budget Policies||$75 billion||$21 billion|
|Total Overlapping Policies||$274 billion||$158 billion|
Source: Office of Management and Budget
*This policy would increase deficits in the near term due to lower federal government payments to fund TRICARE but would save money over the longer term.
There is also some overlap in the major discretionary cuts that each budget identifies, despite the fact that the budgets are far apart in their overall level for non-defense discretionary spending. Based on the discretionary cuts tables in the Trump and Obama budgets, the Trump budget has $9 billion in NDD cuts from programs that overlap with the Obama budget, which cut $1.9 billion from those same programs. The differences are especially concentrated in the Low Income Home Energy Assistance Program (LIHEAP) and the Community Development and Community Services Block Grants (CDBG and CSBG), all of which the Trump budget eliminates but the Obama budget cut by a relatively small amount. In addition, both budgets reduce funding for some major weapons programs—such as the F-35 Joint Strike Fighter, the V-22 Osprey, and the P-8A Poseidon—to the tune of $4.1 billion in the Trump budget and $3.7 billion in the Obama budget, making the total cuts $13 billion for the Trump budget and $6 billion for the Obama budget.
|Department/Agency||Trump Budget Savings||Obama Budget Savings|
|Defense (Major Weapons Programs)||$4 billion||$4 billion|
|Education||$0.3 billion||$0.2 billion|
|Environmental Protection Agency||$0.5 billion||$0.1 billion|
|Health and Human Services (LIHEAP and CSBG)||$4 billion||$0.4 billion|
|Homeland Security||$1 billion||$1 billion|
|Housing and Urban Development (CDBG)||$3 billion||$0.2 billion|
|Justice||$0.2 billion||$0.2 billion|
|Total||$13 billion||$6 billion|
Source: Office of Management and Budget, Environmental Protection Agency, Department of Homeland Security
**Less than $50 million
Clearly, President Trump's FY 2018 budget and President Obama's FY 2017 budget differ in many large and important ways, but within the big picture, there are several details that both have in common. We will see in the coming years if these policies find their way into legislation.