Following months of speculation, President Donald Trump’s budget proposal for fiscal year 2018 was released on Tuesday. Titled “A New Foundation for American Greatness,” the document details his plans to reduce the national deficit, promote job growth and shift government spending.
The president wants to increase funding in some areas, but one segment of his plan puts 66 federal programs on the chopping block, reducing government spending by $26.7 billion. While many on Capitol Hill said the budget was “dead on arrival,” it will likely undergo several drafts and changes before being ratified.
If passed, the current budget could have a monumental impact on many industries. Take a look at the possible impact of Trump’s budget.
Trump’s Budget Offers a Boost to Some Industries
Companies and government agencies providing law enforcement, construction and defense services could greatly benefit under Trump’s budget. By far the front-runner, the president wants to increase defense spending by $52 billion to a whopping $639 billion total, meaning these three companies could really cash in.
Global security and aerospace company Lockheed Martin was the largest U.S. government contractor in 2015, with $36.3 billion contracted. The vast majority — $29.4 billion — was defense contracts, and that number could rise if Trump’s budget passes. The plan calls for the purchase of 70 Joint Strike Fighters, which are made by Lockheed Martin.
The world’s largest aerospace company placed second in both overall federal government contracts and defense contracts in 2015 — $16.6 billion and $14.6 billion, respectively. Despite Trump’s clash with Boeing over the cost of Air Force One, his budget allots for the purchase of 14 Super Hornets. Used by the Navy, Boeing manufactures these fighter jets.
Ranking fourth overall, Massachusetts-based Raytheon garnered $13.1 billion in government contracts in 2015. Almost all — $12.7 billion — was for defense contracts. Trump appears to be a fan of the company, as he chose to use its long-range Tomahawk missiles against Syria in April 2017, so it would likely get even more business with additional funding.
Many Industries Will Take a Hit Under Trump’s Budget
Simultaneously proposing cutbacks and introducing new spending initiatives means Trump’s budget won’t benefit everyone. Funding that powers many industries — healthcare, education, environmental and even some aerospace programs — is slated to be reduced or completely eliminated, which could have a negative impact on these companies.
Not surprisingly, Trump’s budget includes zero funding for Planned Parenthood. For the fiscal year that ended on June 30, 2015, the nonprofit received $553.7 million in government health services grants and reimbursements, totaling 43 percent of its funding. The organization currently provides healthcare to 2.5 million patients, but Trump’s budget puts these services at risk.
Proposed reductions to the National Aeronautics and Space Administration (NASA) budget weren’t extreme — $19.1 billion in funding for 2018, compared with $19.2 billion in 2017 — but this could affect Southern California-based SpaceX. One of NASA’s largest contractors, the agency paid SpaceX $671.9 million in contracts during 2015.
President Trump signed the NASA Transition Authorization Act of 2017 into law in March, but SpaceX founder and billionaire Elon Musk took to Twitter to voice his disappointment about its lack of funding for Mars exploration.
CGI Technologies and Solutions Inc.
Part of Trump’s presidential campaign focused greatly on reducing the size of the Environmental Protection Agency, and his budget reflects that. Trump wants to cut the EPA’s budget from $8.2 billion in 2017 to $5.7 billion in 2018, which would likely have a major impact on the agency’s contractors. The largest, IT services provider CGI Technologies and Solutions Inc. — a 40-year partner of the EPA — received $66.2 million in contracts from the agency in 2015.
Next Steps for the Proposed 2018 Budget
Now that he’s finished with it, Trump’s budget proposal will head to Congress. It’s not expected to pass in its current state — a standard outcome — but lawmakers from the House and Senate will review their respective pieces and work to find common ground.
Fiscal year 2018 begins Oct. 1, meaning lawmakers should have the plan ready to go by Sept. 30. This doesn’t usually happen, so don’t expect any of Trump’s policies to go into effect until the end of the year.