Congressional Budget Office casts doubt on president’s spending plan
WASHINGTON — President Donald Trump had promised that his mix of tax cuts, deregulation and reductions in wasteful spending would spur economic growth and cure the United States’ ailing fiscal health. On Thursday, an independent government analysis of those proposals effectively said, “Not so much.”
The Congressional Budget Office cast Trump’s inaugural budget as overly optimistic, expressing doubt about his promises to balance the federal budget. The budget projected that by 2027 the economy would achieve a small budget surplus. But according to the budget office, the deficit would remain at $720 billion, or 2.6 percent of gross domestic product.
The assessment comes after the Trump administration was criticized in May for releasing a budget that economists said relied on overly rosy growth estimates. It also was panned for using questionable math and offering minimal detail about the president’s tax plan, a central component in Trump’s plans for improving the economy.
One of the biggest reasons the Trump budget fell short is that the budget office did not agree that its proposals would generate as much economic growth as the White House has suggested. It said that the average gross domestic product growth over 10 years is currently 1.8 percent, and that under Trump’s plan it would be 1.9 percent — far lower than the 3 percent the administration assumes.
The lack of specifics in Trump’s plans also was a problem for the Congressional Budget Office. It said that in many cases where Trump’s policy initiatives lacked details, its analysts had to use place-holder figures.
The $4.1 trillion budget for 2018 the White House proposed recommended a large increase in spending on the military and on border security. By assuming rapidly accelerating economic growth, Trump’s economic team was able to make the budget balance without making changes to Social Security’s retirement program or Medicare, the two biggest drivers of the United States’ debt.
Tepid economic growth and an aging population have raised concerns about the
future of those programs. The Trump administration said Thursday the financial outlook for Medicare’s Hospital Insurance Trust Fund had slightly improved in the last year but that Social Security still faced serious long-term financial problems.
The Congressional Budget Office has been under fire from Republicans who claim it has provided faulty number crunching for the party’s proposed health legislation.
Mick Mulvaney, the White House budget director, has called for the office’s influence to be diminished and said recently its time had come and gone. This week, the White House even released a video on its official Twitter account that assailed the credibility of the office.
“The Congressional Budget Office’s numbers don’t add up,” it claimed.
On Thursday, the White House’s Office of Management and Budget found parts of the budget office’s work worthy of praise.
“We are thrilled that CBO confirms that the president’s proposed budget resulted in the largest deficit reduction they have ever scored,” said Meghan Burris, a spokeswoman for the White House budget office. “CBO agrees that this is the largest deficit reduction package in American history.” Over a decade, the CBO said, 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.