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One chart blows up Trump's promise that his budget will eliminate the deficit

Aug 26, 2024, 21:53 IST

The Congressional Budget Office refuted the Trump administration's claims that it can cut taxes and spending and leave the US with a balanced budget.

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In an analysis of the budget released Thursday, the CBO said the Trump plan will shrink the deficit relative to the size of the overall economy, but it projects a budget deficit ten 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 fiscal year 2027, 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.

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Congressional Budget Office

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