In an analysis of the budget released Thursday, the nonpartisan CBO said President Donald Trump’s plan would shrink the deficit relative to the size of the overall economy, but it projects a budget deficit 10 years from now that’s far larger than the Trump administration’s estimates.
The White House projects that the budget could tip into a surplus of $16 billion by the 2027 fiscal year, from a $585 billion deficit in the most recent year, but the CBO’s estimates suggest a deficit of $720 billion in 2027.
The Trump proposal, which isn’t a detailed budget, was released in May and immediately met with criticism over its growth projections and assumptions. For example, predictions of long-term deficit reduction are based on the idea that annual economic growth will hit 3% once tax cuts “prime the pump.” That’s well over the average rate of growth since 1980, which is about 2.6%.
“Nearly all of that difference arises because the Administration projects higher revenue collections – stemming mainly from a projection of faster economic growth,” the CBO said.
- Congressional Budget Office