President Trump’s 2020 budget request released earlier this week projected a reduction in the national debt over a decade and a balanced budget in 15 years. But as many critics have pointed out (see here, here and here), the budget’s assumptions about economic growth, spending cuts and federal revenue levels are unrealistic at best.
What does the president’s budget look like with more realistic assumptions? Using its own rough estimate of how the Congressional Budget Office would score the Trump budget, the deficit hawks at the Committee for a Responsible Federal Budget ran the numbers and found that if enacted, the presidential budget would likely increase the debt to 88 percent of GDP by 2029. By comparison, the White House projected a decrease of the debt to 71 percent of GDP over the same time period.
Annual budget deficits would also rise, CRFB said, coming in at about $1 trillion a year through 2029. By comparison, the White House projects the deficit to fall to $202 billion in 2029 before disappearing completely five years later.
Most of the difference in the estimates was produced by using CBO numbers for just two variables, GDP growth and federal revenues, CRFB said.(The Trump budget included some optimistic projections for tax revenue, contrary to the early indications of the effects of the tax cuts passed in 2017.)
If spending cuts that CBO assumes will occur in the future do not in fact occur, the debt and deficit numbers grow even larger, with the debt-to-GDP ratio rising to 92 percent in a decade.