Congressional Budget Office Casts Doubt on Trump Spending Plan

Posted July 14, 2017

After the budget office released its report on Thursday, they said Mr. Trump would have to address Social Security and Medicare spending and rely on more realistic economic projections to fulfill his campaign pledge to restore fiscal sanity.

The White House Council of Economic Advisers released a report on Wednesday suggesting Medicaid funds would increase by over $250 billion over the next eight years.

The deficit could fall to between 2.6% and 3.3% of gross domestic product over the next 10 years, the CBO said.

By contrast, CBO's analysis of Trump's budget plan shows the deficit steadily rising from $593 billion in fiscal 2018 to $720 billion in fiscal 2027.

"The preliminary analysis from the Office of Management and Budget forecast that 26 million people would lose coverage over the next decade, versus the 24 million [the] CBO estimates", Politico reported in March, citing a document obtained by the publication.

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"The reduction in deficits and debt under the president's budget would be achieved by decreasing both mandatory and discretionary spending significantly compared with projections under current law", the CBO said.

While the CBO gives the administration some credit for the "dynamic" effect of proposed tax cuts and savings on long term economic growth, it has largely treated many of Trump's most ambitious proposals - including more than $7 trillion of proposed tax cuts for businesses and individuals -as works in progress that can't be fully accounted for in projecting long term deficits. Its projections included a $2 trillion math error, claiming the amount would be spent twice on balancing the budget and tax cuts. The White House had claimed it would reach a $16 billion budget surplus by that year.

The deficit cuts may come up short of balance, but the White House noted they are still very ambitious.

The nonpartisan Congressional Budget Office said on Thursday that President Donald Trump's 2018 budget would reduce the federal deficit over the next decade but the reduction will be lower than White House estimates due to slower economic growth.

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