Trump Tells Cabinet Departments to Propose 5% Cuts in Spending

(Bloomberg) -- President Donald Trump told his cabinet departments to propose spending cuts of 5 percent, after the federal budget deficit swelled to its highest level since 2012 during the first full fiscal year of his presidency.

Trump directed his cabinet secretaries to plan for the budget reductions during a meeting Wednesday after he invited in reporters. Trump, an advocate of higher military spending, said he might make exceptions but didn’t elaborate.

“I’m going to ask everybody to come back with a 5 percent cut for our next meeting,” Trump said. “There may be a special exemption, perhaps. I don’t know who that exemption would be.”

He said he’d propose a $700 billion budget for military spending in fiscal 2020, which would be about a $15 billion increase over total appropriations for the Defense Department this year. It’s “a very substantial number,” Trump said, “but it’s defense, it’s important.”

The U.S. budget deficit grew to $779 billion in the fiscal year ended Sept. 30, the highest since 2012 amid a Trump-backed tax-cut package and spending increases.

The budget gap for the 12 months through September was 17 percent wider than the same 12-month period a year earlier. the Treasury Department reported Monday. The deficit as a share of total economic output was 3.9 percent in fiscal 2018, up 0.4 percentage point from the prior year. The government’s fiscal year runs from Oct. 1 to Sept. 30.

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