CBO says Trump budget would reduce deficit but not balance budget

CBO says Trump budget would reduce deficit but not balance budget

President Donald Trump's proposed government spending plan would reduce the federal deficit over the next decade but fail to balance the budget, the nonpartisan Congressional Budget Office said on Thursday.

The White House fleshed out its anti-CBO case in a video that contains some very basic errors.

Under the president's blueprint, annual deficits would range between 2.6% and 3.3% of GDP, down from 3.6% this year, the CBO projects.

The cumulative federal deficit would be one-third smaller than CBO baseline projections that show deficits rising to 5 percent of GDP by 2027, the CBO said.

The initial CBO score of the Senate GOP's health care plan to repeal and replace Obamacare, the Better Care Reconciliation Act, predicted that 22 million more Americans would be without insurance, yet reduce the deficit by $321 billion over the next decade.

According to CBO's calculations, the president's budget over the coming decade would achieve $4.2 trillion of savings, including $2 trillion of cuts in mandatory programs including Medicare and Medicaid, $1.9 trillion of savings in discretionary programs and government operations, and $300 million of reduced interest on the national debt.

The White House projected its budget would lead to 3% annualized economic growth, as many economists noted at the time using some funky math to get there.

The CBO said did not take into account all of Trump's proposals that may affect the economy because "the details on numerous proposed policies are not available at this time". The White House didn't want you to see it.

The analysis came as the administration and Republicans controlling the House are struggling to unite Republicans behind an alternative congressional budget plan that's a prerequisite for a hoped-for tax reform effort this fall.

The White House is likely to take the CBO projection of Trump's budget proposal with a grain of salt.

The Congressional Budget Office estimates President Donald Trump's budget proposal would shrink deficits by almost a third over the coming decade, but not almost as much as the White House projects.

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