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

Trump’s plan likely to cut US deficit by one-third CBO

On Wednesday afternoon, the Trump administration trashed the nonpartisan Congressional Budget Office in an attempt to undercut its dire analysis of Trumpcare. So in some cases, it used the White House's estimates.

Trump's May budget submission proposed jarring, politically unrealistic cuts to the social safety net for the poor and a swath of other domestic programs.

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. "Almost all of that difference arises because the administration projects higher revenue collections - stemming mainly from a projection of faster economic growth".

The CBO said did not take into account all of Trump's proposals that may affect the economy because "the details on numerous proposed policies are not available at this time".




The deficit reduction created by Trump's budget proposal would result from lower spending over the next decade, the CBO said. Largely for the same reasons we explained in May: The tax cuts proposed by the administration would reduce revenue by more than $3 trillion, and the increased borrowing would result in higher interest payments.

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. The changes to Medicaid have been a point of political contention among Republican lawmakers. The White House promised that its juiced-up economic projections will produce $2.1 trillion in deficit reduction, mostly from overhauling the tax code and reducing the burden regulations have on the economy. "The people I worked for in the White House would never have done this".

But the CBO estimates the budget would not balance, refuting the White House's claim that it would. Instead, it estimates that Trump's budget would reduce deficits by a third over the next decade relative to where they would be otherwise.

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