Trump's proposals will balance the budget. Except they won't

Trump's budget: Spends on defense, slashes safety nets

President Trump claims his proposals would likely balance the budget in 10 years. Under his blueprint for next year, the federal government would likely take in more than of which spends by 2027, according to White House estimates.

You’d think independent fiscal hawks would likely be ecstatic. They’re not.

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of which’s because Trump’s balanced budget can be built on unrealistic assumptions — not to mention proposed spending cuts of which would likely largely come at the expense of the poor, the disabled in addition to children.

Too-not bad-to-be-true growth

The White House Budget Office assumes sustained 3% economic growth starting in 2020. of which would likely top the economic growth of the 1990s, according to the Committee for a Responsible Federal Budget.

The Congressional Budget Office, by contrast, assumes average real GDP growth of just 1.8% over the next decade. Private sector forecasts are also lower than the White House estimate.

Related: Trump’s first budget: Trillions in cuts

“While of which can be certainly possible to attain above-trend growth in any given year, of which can be not fiscally responsible to base a budget on the assumption of which such growth can be maintained permanently,” said Robert Bixby, executive director of the Concord Coalition, a fiscal watchdog group.

If CBO’s growth rate were plugged into Trump’s budget, of which would likely still produce a deficit in 2027, according to CRFB’s analysis.

Double-duty tax reform

Trump has touted tax reform with big tax cuts as key to his economic agenda.

in addition to analyses of his prior tax proposals in addition to his latest tax reform outline find of which his ideas would likely result in big, expensive tax cuts, the direct benefits of which would likely flow disproportionately to the highest income Americans.

Despite evidence to the contrary, the administration assumes of which those tax cuts would likely pay for themselves in full through the economic growth they would likely generate. In various other words, more growth means more revenue, in addition to of which revenue would likely offset any initial revenue loss through the tax cuts.

nevertheless the budget appears to use the revenue through growth to pay down debt while also assuming of which Trump’s tax reform will be revenue neutral. “The same money cannot be used twice,” the CRFB has noted.

Related: America’s safety net can be at risk through Trump’s budget ax

Former Treasury Secretary Larry Summers was more biting. “You can’t use the growth benefits of tax cuts once to justify an optimistic baseline in addition to then again to claim of which the tax cuts do not cost revenue. At least you cannot do so in a world of logic,” Summers wrote in an opinion piece for the Washington Post.

Current Treasury Secretary Steven Mnuchin, in an interview at the Peterson Fiscal Summit, downplayed the issue, saying the president’s budget can be “a preliminary document of which will be refined as we go through the process of working with Congress determining how money can be spent in addition to working with the House in addition to Senate on taxes. Ultimately the numbers will be completely transparent.”

Assumption of which controversial Obamacare bill will stand

Republican efforts to repeal in addition to replace Obamacare have been snakebit. After months of controversy in addition to division, the House passed a widely disliked bill, the fate of which right now rests within the Senate. Everyone expects the bill to change a lot, if not completely, by the time the Senate can be through with of which.

nevertheless the Trump budget assumes the House bill — with its more than $800 billion in cuts to Medicaid — will be passed into law wholesale.

An unbalanced approach to balancing the budget

The White House estimates of which the country’s cumulative debt as a share of the economy would likely fall to 60% of GDP by 2027 under Trump’s proposals, down through 77% today.

Most economists in addition to fiscal policy experts have called for lawmakers to slow growth within the country’s debt, because if they don’t the budget will soon become unsustainable as the population ages in addition to health care costs rise.

nevertheless they typically recommend two things: Focus the bulk of the adjustments on the programs of which are the primary drivers of debt: Namely, Medicare in addition to Social Security. in addition to don’t let the burden of any tax increases or spending cuts fall too hard on any one group, while protecting the vulnerable.

Trump’s budget pointedly doesn’t touch Medicare in addition to avoids Social Security’s retirement program.

As for sharing the burden, the Trump budget ax would likely fall pretty heavily on programs benefiting low-income Americans, as well as average Americans who benefit through nondefense domestic programs for which funding would likely be cut by 2% every year.

“The proposed budget reduction fails the test of broadly shared trade-offs in addition to sacrifices,” Bixby said.

sy88pgw (fresh York) First published May 23, 2017: 6:30 PM ET


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Trump's proposals will balance the budget. Except they won't

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