CBO says Trump budget would reduce deficit but not balance budget
- Author: Latoya Cobb Jul 14, 2017,
Jul 14, 2017, 0:13
The short video, issued by the White House, was released onto its YouTube channel.
Under the President's proposals, budget deficits from 2018 through 2027 would total almost one-third less than those in CBO's baseline projections, ranging between 2.6 percent and 3.3 percent of GDP, down from 3.6 percent in 2017.
Over the next decade, the CBO projects nominal GDP to be 6 percent lower than the White House does, while it expects revenues to be $3.6 trillion, or 8 percent, less than what the White House said.
The $4.1 trillion budget for 2018 that the White House proposed recommended a large increase in spending on the military and on border security.
Trump's budget plan, "A New Foundation for American Greatness", unveiled in late May, shows the annual deficit gradually vanishing from an estimated $440 billion in fiscal 2018 to $319 billion in 2023 to a $16 billion surplus by 2027.
CBO's conclusion differs from the White House's largely because the CBO - and most economists - project slower economic growth than the administration assumes.
CBO also said that the Trump budget contained too little detail to accurately predict its effects on the economy.
The White House blueprint would cut $2 trillion in mandatory spending, including $1.9 trillion on health care.
Deficit reductions would be a result of drastic spending cuts proposed under the Trump plan.
The White House released its analysis of the Senate health care bill after disputing the score released by the Congressional Budget Office. Its projections included a $2 trillion math error, claiming the amount would be spent twice on balancing the budget and tax cuts. Trump's spending and tax plans would reduce annual deficits by a cumulative total of $3.3 trillion over the coming decade, rather than the $5.6 trillion of total deficit reduction claimed by the administration.