Trump's budget could reduce deficits, just not as much as he claims

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The White House made a glaring mistake in a now-deleted tweet criticizing the CBO's accuracy
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14 July, 2017

Over a decade, the C.B.O. said, Mr. Trump's budget proposals would reduce the projected $10.1 trillion deficit by $3.3 trillion, not the $5.6 trillion that the White House has projected.

When Trump released his budget proposal, the White House said it would eliminate the deficit in a decade and reduce the national debt to 60 percent of GDP, down from the current 77 percent.

In a show of support for the Republican-backed health care bill, the White House launched an attack on the Congressional Budget Office.

What's more, CBO and the Trump administration differ substantially in projecting economic growth, with Treasury Secretary Steven Mnuchin and others predicting three percent growth in GDP in the coming years compared to CBO's far less optimistic forecast of 1.9 percent growth.

That's opposed to the CBO score, which said the bill would cut Medicaid by almost $800 billion.

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Trump's $4.1 trillion budget, sent to Congress in May, proposed to balance the budget by 2027.

"The president's proposals would affect the economy in a variety of ways; however, because the details on numerous proposed policies are not available at this time, CBO can not provide an analysis of all their macroeconomic effects or of the budgetary feedback that would result from those effects", the report said.

CBO also said that the Trump budget contained too little detail to accurately predict its effects on the economy. This week the White House even released a video on its official Twitter account that assailed the credibility of the C.B.O.

Deficit reductions would be a result of drastic spending cuts proposed under the Trump plan. The White House had claimed it would reach a $16 billion budget surplus by that year.

The analysis came as the administration and Republicans controlling the House are struggling to unite Republicans behind an alternative congressional budget plan that's a prerequisite for a hoped-for tax reform effort this fall.


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