CBO report underscores problems in Trump's budget
The nonpartisan Congressional Budget Office (CBO) has released its analysis of President Trump's proposed budget for Fiscal 2019. Robert L. Bixby, executive director of The Concord Coalition, issued the following statement:
CBO's analysis today of the president's budget is another grim reminder of nation's increasingly dire fiscal outlook.
Perhaps the most illuminating takeaway from the report is that even if projected health care spending could somehow be cut by $1.3 trillion over 10 years and non-defense appropriations could somehow be cut by an average of 4 percent every year, reducing it to less than half its current share of GDP—two very improbable assumptions—the debt would still continue its upward march and deficits would still crash over the trillion-dollar mark by 2028.
When the president released his proposed budget for the coming fiscal years in February, it was immediately clear that it fell far short of what was needed to put the government on a sustainable financial path. Even with gimmicks, unlikely spending cuts and unrealistic economic projections, the budget abandoned the goal of eventually balancing the budget.
Today's CBO analysis of Trump's budget confirms earlier concerns about it, with troubling projections and warnings that elected officials should heed.
Under the president's proposals, CBO says, federal debt would rise from its current level of 78 percent of GDP to 86 percent in 2028. Toward the end of the 10-year projection period, deficits would be on the rise. That is a clear indication of growing troubles after 2028 as well.
The CBO is less optimistic than the administration about how much the president's plan would decrease federal deficits relative to the CBO's current budget baseline over the next decade.
There is a $2.3 trillion difference between resulting deficits under the president's policies depending on whether the administration or the CBO is doing the estimating. This is a classic indication of "rosy scenario" thinking by the administration, primarily in its estimates of economic growth and the revenue ($1.9 trillion higher) going into the Treasury over the next 10 years.
The CBO's report comes after a half-year in which Congress and the president have approved deficit-financed tax cuts and spending increases. This legislation seemed to abandon any pretense of fiscal responsibility by elected officials in Washington. They should be taking advantage of strong economic conditions to reduce federal deficits rather than increasing them.
The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility since 1992.