Ever since it was first introduced, people have been skeptical of President Trump’s budget proposal, particularly its claim that it will result in a surplus within 10 years if followed to the letter. Now, following a recent analysis by the Congressional Budget Office, the White House appears to be walking its claims back a bit.
The White House announced on Friday that, this year, the budget deficit is going to increase to $702 billion. That’s a $99 billion spike from the number that was predicted less than two months ago.
This news from the Office of Management and Budget (OMB) comes shortly after the Congressional Budget Office (CBO) released a report that refuted the original claims about President Trump’s budget being able to balance the federal ledger. The OMB has dropped that claim in its latest report. It is also only providing two years of updated projections.
The deficit for the 2018 budget year, which will begin on October 1, is also expected to reach $589 billion, an increase of $149 billion. Last year’s deficit was $585 billion.
The OMB is blaming worsening tax revenues and, of course, “the failed policies of the previous administration” for the increase in the budget deficit.
On the other hand, the CBO has placed much of the blame on the Trump administration’s optimistic predictions for economic growth. Trump’s budget relies on a three percent annual growth in gross domestic product, but the CBO’s long term projection predicts an annual growth of just 1.9 percent on average.
The CBO has also said that the lack of detail in Trump’s budget proposal makes it difficult for its analysts to determine the overall impact it will have on the economy.
‘The President’s proposals would affect the economy in a variety of ways. 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.’
In addition to blaming tax revenue and the Obama administration, White House budget director Mick Mulvaney has also said that the increasing deficits are a sign of the importance of restoring “fiscal discipline to the nation’s finances.”
‘The rising near-term deficits underscore the critical need to restore fiscal discipline to the nation’s finances. Our nation must make substantial changes to the policies and spending priorities of the previous administration if our citizens are to be safe and prosperous in the future.’
Ultimately, the fate of the budget lies with Congress. Congressional Democrats — and even some Republicans — have been quick to criticize Trump’s budget proposal, which relies on sweeping cuts to a number of federal programs to help reduce the overall deficit. These latest projects surely aren’t going to help the Trump administration in convincing members of Congress that they should make the cuts that Trump has proposed.
A news report about the potential effects of Trump’s budget can be seen below, courtesy of CNBC.