CBO Reveals Reality of Trump’s Cruel Budget
July 13, 2017
The CBO score released today on Trump’s budget revealed the reality of the Trump administration’s claims about their budget – They’re wrong. Trump’s budget will not produce a surplus, the deficit would be larger than predicted and GDP growth would be significantly lower than Trump said it would be.
CBO estimated that under Trump’s proposed budget the deficit would total $720 billion by 2017, not the $16 billion surplus promised by Trump’s administration.
Wall Street Journal: “Under the Trump budget, the federal deficit would total $720 billion by 2027, compared with a $16 billion surplus estimated by the White House, the CBO said in an analysis of the president’s budget released Thursday.”
CBO estimated the deficit under Trump’s proposed budget would be $3.7 trillion larger than the Trump administration estimated.
CBO: “For the 10-year period in total, CBO’s estimate of the cumulative deficit under the President’s proposals (excluding macroeconomic feedback effects) is $3.7 trillion larger than the Administration’s estimate ($6.8 trillion versus $3.2 trillion). Nearly all of the difference is on the revenue side of the ledger: CBO’s estimate of revenues is $3.6 trillion (or 8 percent) lower than the Administration’s. In contrast, CBO’s estimate of outlays is $58 billion (or 0.1 percent) higher.”
CBO’s estimated of the deficit were larger than the Trump administration’s estimated for every single year of the next decade.
CBO: “The deficits that CBO estimates would occur under the President’s proposals are larger than those estimated by the Administration. Nearly all of that difference arises because the Administration projects higher revenue collections stemming mainly from a projection of faster economic growth. CBO and the Administration use different economic forecasts, reflecting differences in projections of economic activity under current law and also economic effects that the Administration attributes to its proposals.”
CBO estimated that GDP would only reach 1.9 percent under Trump’s proposed budget, not 3 percent as estimated by the Trump administration.
CBO: “As a result of those effects, but excluding any changes in people’s incentives to work and save or changes in productivity, average growth in inflation-adjusted GDP over the 2018–2027 period would be about 0.1 percentage point higher under the President’s proposals (at 1.9 percent) than under CBO’s baseline (at 1.8 percent). As a result, GDP would be about 0.2 percent higher in calendar year 2022 than it would be under CBO’s baseline and about 0.7 percent higher in 2027.”
CNBC: “President Donald Trump's newly unveiled budget contains a massive accounting error that uses the same money twice for two different purposes. Based on its supersized projections of 3 percent GDP, the president's budget forecasts about $2 trillion in extra federal revenue growth over the next 10 years, which it then uses to pay for Trump's ‘biggest tax cut in history.’ But then it also uses that very same $2 trillion to balance the budget.”
Trump administration officials have continuously promised GDP growth of at least 3 percent.
Mulvaney: “By the way, if you don’t, the budget will never balance. If you assume 1.9 percent growth, my guess is you’ll never see a balanced budget again. So we refuse to accept that that’s the new normal in this country. Three percent is the old normal. Three percent will be the new normal again under the Trump administration.”
Trump: “President Donald Trump said on Friday that the United States should be able to boost gross domestic product growth far beyond its current levels over time. ‘I really believe it,’0 Trump said in an interview with Fox News. ‘We're saying 3 (percent) but I say 4 over the next few years. And I say there's no reason we shouldn't be able to get at some point into the future to 5 and above.’”