WASHINGTON, DC - FEBRUARY 16:  U.S. President Donald Trump speaks during a news conference announcing Alexander Acosta as the new Labor Secretary nominee in the East Room at the White House on February 16, 2017 in Washington, DC. The announcement comes a day after Andrew Puzder withdrew his nomination.  (Photo by Mark Wilson/Getty Images)
Report: Massive cuts at State Department
02:20 - Source: CNN

Story highlights

The budget would shift the American diplomatic posture around the world

The plan guarantees a fight that will test the White House's capacity to corral lawmakers

Washington CNN  — 

An early glimpse at President Donald Trump’s first budget proposal offers the clearest blueprint yet of how he plans to remake the nation.

The plan envisages a 10% hike in military spending to be paid for by sharp cuts in other government departments, with the State Department and the Environmental Protection Agency each bracing for a particularly painful hit.

If enacted, the plan would involve a radical domestic reshaping of the federal government paired with a shift in the posture of American diplomacy around the world.

It is an approach that flows directly from the rhetoric and positions adopted by Trump on the campaign trail playing to his grass-roots supporters’ deep distrust of Washington and his “America First” political creed.

“This is a landmark event, a message to the world, in these dangerous times, of American strength, security and resolve,” Trump said Monday.

The budget plan comes at a time when the administration is making strenuous efforts to flesh out the ideological and political foundations on which the new GOP White House is built.

Trump to address Congress

Top officials, including the President, previewed a strident change of political direction at the Conservative Political Action Conference (CPAC) last week, and Trump will intensify the effort with his first address to a joint session of Congress on Tuesday night – a crucial moment for the new administration.

But the controversial nature of Trump’s emerging budget – always a magnet for partisan opposition – guarantees a fight that will test the White House’s capacity to corral lawmakers and shape public opinion. It also demonstrates a desire to boost military might and de-emphasize diplomatic reductions that will reverberate in foreign capitals of friends and foes alike.

Already, a cadre of retired generals and admirals has warned that cutting State Department funding on diplomacy and development would make America less safe.

Democrats say they will use every tool at their disposal, which includes the power of the filibuster in the Senate, to block Trump’s plans. The President could also face resistance from Republican budget hawks in Congress.

Defense hawks, meanwhile, are arguing that the $54 billion dollar hike in defense spending is not enough after years of budget sequestration that capped military funding.

It is not yet clear exactly where the cuts will come from. Monday’s announcement involved top-line numbers from the 2018 budget sent to government agencies that must now work out how to adjust their spending.

Any budget issued by the White House is merely an opening bid, and many soon become worthless documents once Congress, with its competing demands on the public purse, gets to work.

Democrats slam proposal

Democrats, who could try to frustrate Trump by refusing to lift caps on defense spending by wielding the Senate filibuster, sensed a political opportunity to undercut Trump’s appeal to working-class voters as they try to rebuild their party’s support ahead of midterm elections next year.

“The budget proposal is a reflection of where the President is at and who he is (and) what today’s hard-right Republican party – which has done this budget through its Cabinet – believes in,” said Democratic Senate Minority Leader Chuck Schumer. “Which is relieve the burdens on the wealthy and special interests, whether they be coal companies or financiers, and put the burden on the middle class.”

But Trump styles himself as a shrewd negotiator steeped in the give-and-take of real estate transactions and is known for making the kinds of bold opening gambits that the budget announcement on Monday represents.

RELATED: Trump proposes $54 billion in cuts to ‘most federal agencies’

The proposals were also formulated directly from the fiery speeches of the President’s campaign, which underpinned his belief that he has a mandate for radical change and might make any compromise harder.

“When you see these reductions, you’ll be able to tie it back to a speech the President gave, or something the President had said previously,” Trump’s budget director, Mick Mulvaney, told reporters on Monday. “We are taking his words and turning them into policies and dollars.”

The goals are consistent with the theory of Trumpism laid out by the President’s political adviser, Steve Bannon, at CPAC last week, which included a push to “deconstruct the administrative state.”

Indeed, the budget would remold the federal government by paring back programs introduced by the Obama administration – for example, EPA regulations on the fossil fuels industry – and other agency reductions.

In practice, according to Mulvaney, that involves a sweeping reset of political priorities.

‘A true America First budget’

“It is a true ‘America first’ budget,” said Mulvaney. “It will show the President is keeping his promises and doing exactly what he said he was going to do when he ran for office. It prioritized rebuilding the military, including restoring our nuclear capabilities, protecting the nation and securing the border, enforcing the laws currently on the books, taking care of vets and increasing school choice.”

Still, with Trump vowing not to touch popular non-discretionary spending targets like Medicare and Social Security, his budget team faces a tortuous task in wringing out savings at agencies while preserving room for Trump’s promised big tax cuts. Every dollar that is cut from discretionary spending could affect other popular and vital programs, including transportation, conservation, agriculture and commerce – all of which have powerful lobbies ready to go into battle for their funding.

And Trump does not want to tighten the national belt everywhere. For instance, he is proposing spending billions of dollars on his pet project of a southern border wall, though he has promised Mexico would pay for it.

And officials say the President will also lodge a supplemental spending request later this year to finance an intensified campaign against ISIS in Syria and Iraq that is being drawn up by the Pentagon and reviewed by the White House.

Where the cuts fall, they will be painful.

EPA a major target

The EPA is one of the agencies in the firing line and is now led by an authentic conservative, Scott Pruitt, who energetically sued the body he now leads over Obama-era environmental regulations.

Pruitt said at CPAC on Saturday that conservatives who wanted to see the agency eliminated entirely were “justified” and compared it to the IRS. While declining to speculate on the agency’s new budget, he pledged to halt the regulatory culture of the previous administration – especially as related to global warming – and to devolve functions to the states.

“The future ain’t what it used to be” at the EPA, Pruitt said.

A source with knowledge of the budget deliberations at the agency said cuts were likely to come from non-capital investment expenditures.

“You’re not going to see cuts to programs that require us to build things like: building waste water facilities, building facilities for clean water,” the source said. “We are committed to capital investments.”

The State Department, which already appears to be ebbing in influence on the conduct of foreign policy, is also in the firing line – with foreign aid programs expected to be particularly hit.

“The President said we’re going to spend less money overseas and spend more of it here,” Mulvaney noted. “That’s going to be reflected with the number we send to the State Department.”

Foreign aid accounts for less than 1% of the federal budget but is a lightning-rod issue for many conservatives who see it as a waste of money.

A reduced role and budget for the State Department could give new credence to fears abroad that the Trump administration will step back from traditional US engagement, which has been at the center of the global system for decades.

Fight brewing at State Department

But Trump faces a fight when it comes to trimming the wings at State – possibly from within his own administration.

Defense Secretary James Mattis, for instance, warned against cutting diplomatic resources during congressional testimony in 2013.

“They need to be as fully funded as Congress believes appropriate because if you don’t fund the State Department fully, then I need to buy more ammunition,” said Mattis, who was then serving as the head of Central Command.

Several of Mattis’ former colleagues, including celebrated generals like David Petraeus and admirals like James Stavridis, the former supreme commander of NATO, wasted little time in mobilizing to challenge his proposals.

The list of 121 military figures warned that State Department diplomacy, aid and programs were vital to preventing conflict overseas and could mitigate the need for costly and bloody military deployments.

“The State Department, USAID, Millennium Challenge Corporation, Peace Corps and other development agencies are critical to preventing conflict and reducing the need to put our men and women in uniform in harm’s way,” the senior officers said in a letter to bipartisan congressional leaders as well as top officials in the administration.

CNN’s Ross Levitt and Rene Marsh contributed to this story