The non-partisan Committee for a Responsible Federal Budget has released this analysis of Trump's budget. Listed below are the Committee's five key findings. The first three seek simply to state what the Trump Administration says is coming, including the Administration's predictions of enormous economic and political success. The last two are the Committee's attempts to deal with reality.
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The budget proposes about $3.6 trillion of deficit reduction, including $1.5 trillion from largely unspecified discretionary cuts, $2.8 trillion in net mandatory cuts, $1 trillion less in revenue – mainly from repealing and replacing the Affordable Care Act (ACA) – and $300 billion in interest savings.
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According to the Office of Management and Budget (OMB), the budget would reduce debt from 77 percent of Gross Domestic Product ($14.8 trillion) today to 60 percent of GDP ($18.6 trillion) by 2027.
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OMB also estimates the budget will balance by 2027, down from a deficit of 3.1 percent of GDP ($603 billion) in 2017.
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To achieve balance, the budget projects spending will shrink from 21.2 percent of GDP ($4.1 trillion) today to 18.4 percent of GDP ($5.7 trillion) by 2027 and revenue will grow from 18.1 percent of GDP ($3.5 trillion) today to 18.4 percent ($5.7 trillion) of GDP by 2027.
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The estimates in the President’s budget are based on overly optimistic economic projections, which we recently estimated are responsible for $2.7 trillion of debt reduction. Using the Congressiona Budget Office's (CBO) growth numbers, we found debt under the budget would likely remain stable, and deficits would remain above 2 percent of GDP.
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The budget also relies on a number of unrealistic policy assumptions by assuming deep unspecified non-defense discretionary spending cuts and omitting any details on the President’s potentially costly tax plan.
