Treasury Secretary Steven Mnuchin on Thursday seemed to indicate that President Trump’s forthcoming budget proposal will not balance over a decade, a common goal for fiscal conservatives.
Speaking to Fox Business, Mnuchin said that he thought the deficit as a percentage of gross domestic product was “manageable,” but needed to come down over time.
“Under the president’s budget proposal, we reduce that significantly over the next 10 years,” he said. Trump’s 2021 budget proposal is expected on Monday.
Trump’s first two budget proposals laid out plans to eliminate the deficit altogether through a combination of deep domestic spending cuts and very optimistic growth projections over a 10-year period.
Last year, the plan only found balance after 15 years. Budget watchers criticized it for its overly optimistic economic forecasts, which assumed the economy would grow an average of 3 percent every year.
Since Trump took office, the highest growth figure was 2.9 percent in 2018. It fell to 2.3 percent last year.
The Congressional Budget Office (CBO) is projecting growth over the next decade to average just 1.7 percent.
In the meantime, the deficit has grown, and is expected to surpass $1 trillion this year for the first time since the financial crisis.
Mnuchin on Thursday blamed the deficits on spending, noting that Democrats insisted on increasing domestic spending as Trump pushed for higher defense spending. The CBO projected that the tax cuts would add $1.9 trillion to the deficit over a decade.
He reiterated his belief that the 2017 GOP tax cuts would pay for themselves, a claim that experts have found exasperating as deficits have soared and economic growth has failed to hit promised highs.
“The tax cuts, I think, will pay for themselves, but that was always backended. In the front part, it was growing the economy,” Mnuchin said.
“We just need to grow the economy faster than we grow government spending, and that will reduce the deficit,” he added.
–Updated at 11:18 a.m.