White House says bud­get deficit to be $99bn higher this year

Kuwait Times - - BUSINESS -

The White House says wors­en­ing tax rev­enues will cause the bud­get deficit to jump to $702 bil­lion this year. That’s a $99 bil­lion spike from what was pre­dicted less than two months ago.

The re­port from the Of­fice of Man­age­ment and Bud­get comes on the heels of a ri­val Con­gres­sional Bud­get Of­fice anal­y­sis that scut­tled White House claims that its May bud­get, if im­ple­mented to the let­ter, would bal­ance the fed­eral ledger within 10 years. The OMB re­port doesn’t re­peat that claim and in­stead pro­vides just two years of up­dated pro­jec­tions. The White House bud­get of­fice also says the deficit for the 2018 bud­get year that starts on Oct. 1 will in­crease by $149 bil­lion to $589 bil­lion. But law­mak­ers are al­ready work­ing on spend­ing bills that prom­ise to boost that num­ber even higher by adding to Trump’s Pen­tagon pro­posal and ig­nor­ing many of Trump’s cuts to do­mes­tic pro­grams.

Last year’s deficit reg­is­tered $585 bil­lion. The White House kept the re­port to a bare-bones min­i­mum and cast blame on “the failed poli­cies of the pre­vi­ous ad­min­is­tra­tion .” “The ris­ing near-term deficits un­der­score the crit­i­cal need to re­store fis­cal dis­ci­pline to the na­tion’s fi­nances,” said White House bud­get di­rec­tor Mick Mul­vaney. “Our na­tion must make sub­stan­tial changes to the poli­cies and spend­ing pri­or­i­ties of the pre­vi­ous ad­min­is­tra­tion if our cit­i­zens are to be safe and pros­per­ous in the fu­ture.” In late May, Trump re­leased a bud­get plan propos­ing jar­ring cuts to do­mes­tic pro­grams and promis­ing to bal­ance the bud­get within a decade. But it re­lied on rosy pre­dic­tions of eco­nomic growth to prom­ise a slight sur­plus in 2027. Trump’s bud­get, how­ever, left alone So­cial Se­cu­rity re­tire­ment ben­e­fits and Medi­care, though House Repub­li­cans are poised next week to again pro­pose cut­ting Medi­care as they un­veil their non­bind­ing bud­get out­line.

CBO says that Trump re­lied on far too op­ti­mistic pre­dic­tions of eco­nomic growth and that Trump’s rosy pro­jec­tions are the chief rea­son his bud­get doesn’t bal­ance as promised.

Trump’s bud­get pre­dicts that the US econ­omy will soon ramp up to an­nual growth in gross do­mes­tic prod­uct of 3 per­cent; CBO’s long-term pro­jec­tions pre­dict an­nual GDP growth av­er­ag­ing 1.9 per­cent. —AP

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