A great deal of chaos has consumed the first couple months of President Donald Trump's administration, including the expansion of the Russia collusion scandal, the Muslim immigration ban and ongoing court battles, and the embarrassing but thankful collapse of Trumpcare.
In the middle of this chaos a few weeks ago emerged the Trump budget plan for the coming fiscal year. In Trump's budget proposal, funding for every department and agency was slashed except for the Departments of Defense, Homeland Security and Veterans Affairs. It remains unclear if there would be any benefits to Guam from the increases to these departments. Homeland Security's increase mostly goes to building a wall on the Mexican border. The Defense and Veterans Affairs' increases proposed by Trump may have no impact on the planned military buildup or local veterans services, especially as the increase for the VA was only half of what national veterans organizations were seeking from the White House.
Broad, far-reaching impact
The impact to local services from proposed budget cuts for the remaining agencies are broad and indeed far-reaching. Proposed are cuts to funding for Meals on Wheels for our island's elderly – which was expanded to Saturday deliveries just a few years ago – and to funding for programs to help the neediest individuals in our society. Key agencies such as the National Institutes of Health received a 20 percent cut, and funding for the U.S. Environmental Protection Agency was cut by more than 30 percent. Of particular importance to Guam is the elimination of FEMA's Pre-Disaster Mitigation Grant Program, from which Guam received $1.7 million just a little over a year ago.
Aside from the impact on families, there are fiscal implications for the government of Guam as well. A considerable portion of GovGuam's annual budget comes from federal matching or 100 percent federally funded programs. Since the Gov. Eddie Calvo administration submitted its fiscal year 2018 budget before the Trump budget, it could not have taken into account Trump's cuts in federal funding. Additionally, a tax cut is almost assured to pass this year by the U.S. Congress. Any federal tax cuts will automatically reduce tax revenue for GovGuam, which remains in recovery mode from fiscal challenges. The combination of cuts in federal programs and tax revenues will make the task of balancing the budget for the government of Guam even harder, and will require Gov. Calvo and all 15 senators to work together in what is expected to be the most challenging of times to adopt a budget for the upcoming fiscal year.
The financial damage, however, would not be limited to just GovGuam. Many nonprofit organizations that do valuable if not vital work in our community would also be affected by the Trump budget. Sanctuary Inc. would be badly hurt by cuts to the Community Development Block Grant. The elimination of the National Endowment for Humanities would slash funding for the Guam Humanities Council, and the elimination of the Corporation for Public Broadcasting would be a blow to the KPRG public radio station. The elimination of Legal Services Corp. funding would probably close the Guam Legal Services Corp., which has provided legal services for the disadvantaged, and has been at the forefront of efforts to improve care for mental health clients.
Non-military federal spending
The reduction in federal funding is not just a budget issue for GovGuam and nonprofit groups. It is also an economic issue for the entire island. It is largely understood by everyone that two mainstays of our economy are tourism and military spending. However, what also contributes significantly is non-military federal spending, since it represents new dollars coming into economy. Every supermarket and grocery store owner understands the importance of the Food Stamp program to its operations. Landlords who rent inexpensive apartments also understand the impact of the Section 8 housing program to the housing market. Substantial reductions in non-military federal spending have inevitable adverse impacts on private sector growth.
If there is any good news for Guam, it is that given Trump's failure to replace and repeal Obamacare, his low approval ratings, the Russia scandal and the weight of his many other controversies, Congress will probably ignore Trump and write its own budget.
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