Trump's next budget hopes to eliminate some federal agencies

By JOSH BOAK Markets Associated Press

The Trump administration aims to further tighten its grip on spending, issuing a memo Friday that calls for eliminating some federal agencies and cutting government jobs as part of the upcoming fiscal 2019 budget.

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Office of Management and Budget Director Mick Mulvaney wrote in the memo to agency and department heads that the goal is "ensuring that the federal government spends precious taxpayer dollars only on worthwhile policies." He added that the 2019 budget would be a "comprehensive plan" to reduce the number of government workers and merge or terminate federal agencies as requested by an executive order signed in March by President Donald Trump.

The guidance follows on the spirit of Trump's 2018 budget proposal initially outlined in March. That blueprint would sharply reduce spending for Medicaid, food stamps and student loan subsidies, among other programs. Even Republican lawmakers called the cuts draconian and have said the proposal was unlikely to survive intact in Congress, which is writing legislation to fund government agencies and departments.

The White House budget plan also gave ammunition to Democrats who said that Trump had turned against his own supporters in the industrial Midwest and rural counties. The budget reduced funding for infrastructure, small regional airports and an environmental cleanup program for the Great Lakes.

Mulvaney said in the memo that spending reductions are necessary to achieve annual economic growth of 3 percent. Most economists say the United States will struggle to grow much faster than 2 percent a year due to baby boomers retiring and relatively low productivity gains. But Trump has promised to restore growth to the average previously seen in the half-century after World War II.

The memo for fiscal 2019 is an initial step for a budget the White House would propose early next year.

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Mulvaney said that agencies should plan to spend at the levels proposed in the 2018 budget during fiscal 2019. Fiscal 2018 begins Oct. 1, and fiscal 2019 would get under way Oct. 1, 2018.

Agency heads are allowed to submit requests for additional 5 percent in funding levels that would be applied to "effective programs," the memo said. But Mulvaney doesn't specify what constitutes an effective program and said they would be closely scrutinized.

The memo said the agencies and departments are to submit their budget requests to OMB no later than Sept. 11. Each agency budget submission is to include any costs or savings for proposals to overhaul or streamline the government's structure.