Trump Proposes Cuts in Social Safety Net, Foreign Aid For 2021 Budget

United States President Donald Trump will propose cutting billions of dollars in U.S. social safety net and foreign aid in his fiscal 2021 budget, which begins on Oct. 21, while redirecting and increasing funds to counter China and Russia, senior administration officials told Reuters.

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According to an administration official, Trump will seek to make a 21 percent cut in foreign aid in the proposal, reducing the budget to US$44.1 billion in the upcoming fiscal year compared with $55.7 billion enacted in fiscal year 2020.

The White House proposes to slash spending by US$4.4 trillion over 10 years. That includes US$130 billion from changes to Medicare prescription-drug pricing, US$292 billion from cuts in safety-net programs - such as work requirements for Medicaid and food stamps - and US$70 billion from tightening eligibility rules for federal disability benefits.

In contrast, the president would request an increase in funding for the U.S. International Development Finance Corporation (DFC) to US$700 million compared to US$150 million the previous year.

The DFC, formerly Overseas Private Investment Corporation, was established in 2019  in large part to counter China’s growing economic influence. It serves as a development bank that partners with the private sector to provide loans in developing countries, pushing Washington’s agenda. 

The budget also proposes US$1.1 billion for cybersecurity efforts by the U.S. Department of Homeland Security. While military spending would see another increase by 0.3 percent to US$740.5 billion. 

Last month, while in Davos attending the World Economic Forum's summit along with the world’s leaders and businessmen,  Trump already warned in an interview with CNBC that he would consider cutting key social programs if re-elected to a second term.