CBO: Trump budget won’t 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 still would 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 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 that solved many of the country’s budget problems.

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 Republicans 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 scale spending reductions and unspecified tax cuts will lead to economic growth, CBO could make it harder for this coalition of GOP lawmakers to band together. House lawmakers had hoped to begin voting on their budget plan as soon as next week.

Some key elements of the White House’s agenda rely on Congress’s ability to pass a budget. For exam- ple, they only need 50 Republicans in the Senate to approve a tax plan if it is part of an already authorized budget plan through a process known as reconciliation. If Congress doesn’t pass a budget plan, they will need 60 votes to authorize tax cuts. There are only 52 Republicans in the 100-seat Senate, meaning they would have to cut deals with Democrats under this scenario.

CBO’s new projections came with a significant caveat, saying the lack of detail the White House has provided about its plans — primarily its plan to overhaul the tax code — made it virtually impossible for the agency to determine what the economic impact of these ideas would be. The White House has put out only a sparse, onepage blueprint for overhauling the tax code.

“The president’s proposals would affect the economy in a variety of ways,” CBO wrote in its assessment. “However, because the details on many of the proposed policies are not available at this time, CBO cannot provide an analysis of all their macroeconomic effects or of the budgetary feedback that would result from those effects.”

And there were cases where the CBO simply rejected the White House’s budget cutting assumptions. For example, the White House said that “reducing improper payments governmentwide” would save $139 billion over 10 years, something they believe would help them eventually eliminate the deficit. But CBO said the White House simply wouldn’t provide enough details as to where the White House would find such improper payments to eliminate, and it discounted any savings from this endeavor.

Still, CBO said the White House’s plan would essentially cut government spending by $4.2 trillion over 10 years compared with existing law, a very large sum.

The White House seized on this element of CBO’s assessment in its initial response.

“We are thrilled that CBO confirms that the president’s proposed budget resulted in the largest deficit reduction they have ever scored,” White House Office of Management and Budget spokeswoman Meghan Burris said. “This administration is committed to making the necessary investments to restore our military, secure our borders, and modernize our infrastructure.”