Trump’s Tax Plan Likely to Limit Options in Space

Donald Trump (Credit: Michael Vadon)
Donald Trump (Credit: Michael Vadon)

During an appearance in Florida one week before the election, Republican vice presidential candidate Mike Pence promised that he and Donald Trump would reinvigorate the nation’s space program.

However, the incoming administration’s larger economic priorities are likely to limit its options for any large-scale space exploration efforts.

President elect Trump’s biggest priority is a massive tax cut that would primarily favor corporations and upper income Americans. It would also lower taxes slightly for many middle class families while actually raising taxes for some of them. CBS News has a full analysis. Some of the highlights:

Right now, a single parent with $75,000 in income and two children can claim a head of household deduction of $9,300, plus three personal exemptions. Those steps would reduce the household’s taxable income by $21,450, to $53,550.

Trump’s plan would more than double the standard deduction to $15,000. But that change would be outweighed by his elimination of personal exemptions and head-of-household status. So the family’s taxable income would be $60,000, and their tax bill would be $2,440 more than it is now.

A married couple with four children and income of $50,000 would absorb a tax increase of $1,090 because of their loss of personal exemptions.

For middle-income earners as a whole, the Trump proposals would cut taxes, even taking into account the increases on single-parent families. Those earning nearly $50,000 to about $83,000 — the middle one-fifth — would receive an average cut of $1,010, according to the Tax Policy Center. That would lift their after-tax incomes 1.8 percent.

By contrast, the wealthiest 1 percent — those earning over $700,000 — would enjoy a tax cut averaging nearly $215,000, boosting their after-tax incomes 13.5 percent. And the richest 0.1 percent — those making above $3.7 million — would receive a bonanza: An average tax cut exceeding $1 million.

Or, to put it another way, middle class earners as a whole would end up seeing roughly an extra $84.17 in their income per month. The 1.8 percent increase would be slightly above the current 1.6 percent inflation rate. Assuming inflation stayed the same, it would eat up $74.82 of the increase of those who would see a tax cut, leaving them with an extra $9.35 per month. That would get you about six small cups of coffee at Starbucks.

“Trump’s campaign rhetoric may have been populist, but his tax plan isn’t,” Howard Gleckman, a senior fellow at the policy center, wrote on its website.

Trump views the plan as a way to boost the economy by putting more money in the hands of taxpayers. However, it also will reduce government tax revenues by trillions of dollars over the next decade. And it could lead to a continuation of large federal budget deficits over that period, something Republicans have decried in recent years.

Trump and the Republican Congress have a plan to deal with part of this problem.

Hiring freezes, an end to automatic raises, a green light to fire poor performers, a ban on union business on the government’s dime and less generous pensions — these are the contours of the blueprint emerging under Republican control of Washington in January….

Top Republicans on Capitol Hill say their first priority will be making it easier to fire employees regarded as incompetent or who break the rules….

Chaffetz said he plans to push through wholesale changes to the generous retirement benefits that federal workers receive, by shifting to a market-driven, 401(k)-style plan for new employees….

The promises go hand in hand with Trump’s promise to shrink the size and reach of government, from eliminating some agencies outright to lifting regulations and running the bureaucracy with fewer people….

Trump has promised that in his first 100 days in office he will freeze hiring by not replacing employees who leave. The military and employees in public health and safety roles would be exempt, according to the president-elect’s Contract with the American Voter.

He has pledged to eliminate two regulations for every new one passed and shut down the Education Department and parts of the Environmental Protection Agency.

With all these planned cuts come spending increases in areas long favored by Republicans, however.

But he also wants a military with more ships, planes and troops. He has said he wants to triple the number of immigration enforcement agents and beef up the Border Patrol by thousands.

In terms of space, Trump and the Republicans are looking to boost spending on hypersonic weapons and satellite defense systems, among other things.

In terms of NASA, the incoming administration and Congress appear to be in agreement to cut the space agency’s Earth science program, especially spending on climate change research. They also have promised to transfer the what is left to NOAA.

The scope of these reductions remains uncertain. Environmentalists and climate researchers are decrying these efforts, saying that global change is a genuine and serious threat to the planet that cannot be ignored.

Congressional Republicans have called global warming a hoax. Trump has publicly stated that it was  created by the Chinese government to destroy American industry. The Chinese pointedly denied the charge after the election.

The Trump plan would also seek to reduce costs by having NASA enter into more public-private partnerships. However, it’s not clear what the new administration has in mind. NASA has already outsourced cargo and crew deliveries to the private sector; the agency has more traditional contractor relationships for many of its other programs.

One potential area of savings would be to cancel two of NASA’s biggest initiatives, the Space Launch System (SLS) and the Orion spacecraft. However, those programs employ a lot of well-paid people in states like Alabama, Texas and Florida that were key to Trump’s victory. They also have strong political support; an effort by the Obama Administration to cancel these programs failed.

These programs are key to NASA’s long-term plan to send astronauts beyond low Earth orbit. What Trump would replace them with is unclear, although the space agency is soliciting ideas for alternatives. Whether those alternatives are viable given strong Congressional support for SLS and Orion remain to be seen.

NASA’s other major budget items are the International Space Station and the commercial crew and cargo programs that keep it supplied. The Obama Administration’s policy is to extend use of the station from 2020 to at least 2024.

There have been no statements from the Trump camp that this decision would be overturned. Every international partner except ESA has agreed to the extension. The Europeans are set to decide the matter at the end of next week.

How well the NASA would function under a hiring freeze is unclear. Reductions in pay and cutbacks in pensions and other benefits could lead to an exodus of talent that would benefit the growing private space sector, but leave the space agency short of expertise and unable to fill key positions. Employees of lesser talent unable or unwilling to leave for private industry could be left behind.

All of these moves could have a seriously adverse impact on the best funded and most accomplished space agency in the world.  It could be very difficult for Trump to make America great again in space with an underfunded, understaffed agency whose programs are squeezed by tax cuts and budget deficits.

Trump has yet to lay out a clear vision for what he wants to do on the civilian side of space. And we’ll see what Congress does with the president elect’s economic plan. But, we could end up with an administration that wants to make NASA great but whose efforts are subsumed by its other priorities.