Deficit hawks slam Trump budget as unrealistic

Budget watchers and deficit hawks on Monday excoriated President Trump’s fiscal 2021 budget proposal for relying on what they called overly optimistic economic assumptions and unrealistic plans to tackle the nation’s $23 trillion debt.

“When you peel away the rosy growth assumptions, the assumed reversal of spending increases the President has already signed into law, and the exaggerated and unspecified savings, we are still left with a mountain of debt,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, in a statement.

The White House budget request to Congress assumes 3.1 percent average annual growth over the next 10 years, up from the 3 percent projected in previous Trump administration proposals. The U.S. economy has yet to expand 3 percent for any of the years that Trump has been in office.

The economy grew 2.4 percent in 2017, before accelerating to 2.9 the following year and then slowing to 2.3 percent in 2019. The nonpartisan Congressional Budget Office (CBO) has projected growth will slow further to 2.2 percent this year, while the White House estimates a more robust 2.8 percent expansion.

While the president’s budget request is routinely ignored by Congress, regardless of which party is in power, brisk growth lets budget writers assume higher tax revenue and fewer people in need of poverty assistance or other government programs, which in turn brings down deficit assumptions.

But some budget hawks say the latest White House budget proposal for the 2021 fiscal year, which begins Oct. 1, is at odds with steps the administration has taken.

“Actions speak louder than words, and over the past three years the President has signed $4.7 trillion of new debt into law. Digging our way out of that hole will require tax and spending changes far greater than what the President has proposed here,” MacGuineas said.

The White House said its proposal lays out a path to eliminate the deficit in 15 years instead of the typical 10-year budget window, and relies on deep cuts to nondefense spending and mandatory programs to achieve that goal. Defense spending would continue, while taxes would be cut, rather than increased, to tackle the deficit, the White House said.

Michael A. Peterson, CEO of the fiscally conservative Peter G. Peterson Foundation, said those kinds of cuts were unrealistic.

“Today’s budget proposal relies on optimistic projections for economic growth and unlikely budget cuts to illustrate deficit reduction,” he said. “The reality is that in order to manage our rapidly growing debt, we need to address the big issues – the aging of our population, rising healthcare costs and inadequate revenues.”

The deficit is expected to surpass $1 trillion this year for the first time since 2012, when deficits soared following the Great Recession. The CBO has projected that absent a change, deficits will average $1.3 trillion over the next decade, adding to the federal debt, raising interest costs and limiting policy responses to any economic downturns.

Robert L. Bixby, executive director of The Concord Coalition, said Monday that Trump’s 2021 budget proposal is far from what the administration projected shortly after the president took office.

Trump’s first budget, Bixby noted, projected that the deficit in 2021 would fall to $456 billion, less than half the $966 billion the White House is now projecting.

“The rapidly deteriorating change comes from about $300 billion less in projected revenues and $200 billion more in projected spending,” Bixby noted.

Still, Trump won praise for some aspects of his budget proposal.

MacGuineas said the budget includes “a number of thoughtful policy improvements, especially in the Medicare space.”

Conservative organizations such as The Heritage Foundation praised the spending plan for keeping taxes low and keeping “pro-growth policy.”

If anything, Heritage said, Trump didn’t go far enough.

“A number of policies in the budget represent missed opportunities,” said Romina Boccia, who heads Heritage’s federal budget center.

“The administration must stay the course and not fall prey to using the budget as a vehicle for problematic policy initiatives, including misguided infrastructure funding from Washington and a federal encroachment in education policy,” she said, referring to Trump’s proposed $1 trillion in infrastructure spending.

Updated at 2:57 p.m.