CBO: Budget doesn’t do much to grow economy

WASHINGTON » The Congressional Budget Office said Thursday that President Trump’s first budget plan would not eliminate the deficit over 10 years or grow the economy at all by 2021, casting doubt on the administration’s controversial economic assumptions that were supposed to bolster key parts of the White House’s agenda over the next year.

CBO projected that the sweeping spending reductions on anti-poverty programs, housing, environmental protection, and a number of other initiatives that the White House wants to cull back would still not be enough to eliminate the deficit by 2027.

But in that year, the deficit would be $720 billion under the White House’s budget, CBO said. The White House asserted the government would actually have a budget surplus in 2027 if its policies were enacted, bringing in more money through revenue than it spent. That’s a more than $700 billion gap in just one year between the CBO and White House.

This contrasts sharply with the White House’s internal estimates, which argued that cutting taxes would create an economic boom.

The White House also estimated that its budget changes would lead the economy to grow by 3 percent per year. CBO found, however, that economic growth would only average 1.9 percent per year under the White House’s plan.

The assessment raises new questions about whether the GOP will be able to build a coalition of conservative and centrist lawmakers who can agree on a single budget proposal. By rejecting the White House’s declaration that large spending reductions and unspecified tax cuts will lead to growth, CBO could make it harder for this coalition of GOP lawmakers to band together.