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