"You cannot grow your away our of $20 trillion in debt or anything close to it," said Maya MacGuineas. "For the whole campaign we had a free lunch discussion as though there are no hard choices to be made. That’s just not true. We have a lot of choices we face in our budget and we’re going to have to come to terms with them. Otherwise we’ll be creating a big government debt bubble -- that would hurt the markets and that would hurt the economy."
As troubling as this should be to any American, the future looks even worse according to Congressional Budget Office (CBO) projections, as presented by the Committee for a Responsible Federal Budget. CRFB is a nonpartisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact.
To quote CRFB, “Under CBO’s current law baseline, annual deficits will return to trillion-dollar levels by 2024. Under a more pessimistic Alternative Fiscal Scenario in which policymakers fail to pay for new spending and extended tax cuts, trillion-dollar deficits return to 2021 and reach $1.5 trillion — a nominal-dollar record — by 2026.”
“Now, 35 years after the Greenspan Commission was created, it is time for a new bipartisan commission focused on strengthening Social Security for current and future generations,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a non-partisan public policy organization, during a Capitol Hill briefing on Wednesday.
“A commission creates an environment for compromise where a deal can be struck and where both parties can work together,” Ms. MacGuineas said. “Troublesome political and technical issues can be worked out more easily under the umbrella of political cover that a commission would provide.”
The Committee for a Responsible Federal Budget (an independent organization) estimates that Trump's tax plan will add $4.5 trillion to the deficit over the next 10 years. That could add an additional $450 billion to the annual red ink.
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The government deficit, according to analysis from the Committee for a Responsible Federal Budget, would grow by $450 billion by 2021 as a result of Trump's proposed rise in military spending and repeal of the Budget Act’s defense sequester.
“At the end of the day, if you don’t do entitlement reform, you’re not doing anything at all” to address the nation’s long term budget and economic problems, [ Rep. Tom] Cole said on Wednesday morning during a conference on Social Security on Capitol Hill sponsored by the Committee for a Responsible Federal Budget.
“I’m more interested in process than I am in the various proposals,” he said. “There’s a lot of different ways, particularly with Social Security. It’s a pretty easy problem to solve because it’s basically a math problem. We know how many people are turning 65, we know about what their life expectancy is, we know about what they paid in, you can predict the revenue flow pretty easily.”
Congress and Trump are going to have to figure out a way to pay those bills and somehow deal with a debt that’s about to top $20 trillion, or double what it was when President Barack Obama took office eight years ago...“That’s going to be a real mess,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, a Washington budget watchdog group.
Estimates from independent think tanks, such as the Tax Policy Center and the Committee for a Responsible Federal Budget, place the revenue loss from Trump’s entire tax platform — which includes major cuts to the estate, capital gains and corporate income taxes — between $5.8 trillion and $6.2 trillion over the next decade.
Trump has called for a massive $1 trillion infrastructure plan to build bridges, roads, and other infrastructure while planning to cut $9.5 trillion worth of taxes for both citizens and corporations. When all is said and done, Trump’s policies are expected to add $5.3 trillion to the national debt, according to analysis from the Committee for a Responsible Federal Budget.
Federal budgeting requires meticulous planning, noted Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonprofit that favors limiting government debt. "It cannot be done in an ad-hoc way," she said. "The very premise of a budget is to look at things comprehensively."
The nonpartisan Committee for a Responsible Federal Budget projected Trump's campaign proposals would add $5.3 trillion to the federal debt during the next decade.
Fiscal responsibility groups are sounding alarms about the prospect of massive infrastructure spending combined with tax-code changes that could drain $5 trillion from the Treasury. Committee for a Responsible Federal Budget chairmen Mitch Daniels, erstwhile Defense Secretary Leon Panetta, and former Rep. Tim Penny, I-Minn., in a statement, called such a move “myopic.”
Trump is no stranger to debt and has used it to his advantage often throughout his high-flying career. “This guy has lived on debt, for god sake,” former CIA director Leon Panetta quipped on Thursday at a conference staged in Washington by the Committee for a Responsible Federal Budget, a premier anti-deficit research organization. “He doesn’t think it’s a bad thing.”
Trump’s tax cuts and infrastructure spending plans would add about $6 trillion to the national debt over the coming decade, according to the independent nonprofit Committee for a Responsible Federal Budget.
The incoming Trump administration must persuade the American people to make entitlement reforms and debt-reduction priorities “or jeopardize our future,” former House Budget Chairman and White House Budget Director Leon Panetta told a luncheon Thursday...
“With the exception of Harry Truman during World War II, no new president has entered office with a debt burden as high as the one you will face upon being sworn in,” the three wrote in a six-page memorandum. “The reason we are here is, unfortunately, that we never seem to learn the lessons of history,” Panetta told the Capitol Hill luncheon gathering sponsored by the Committee for a Responsible Federal Budget.
“It is an enormous impediment to long-term growth in this country,” said Daniels, who served as President George W. Bush’s first budget director. “The president-elect didn’t cause this problem, but I think he is that president for whom it will not wait another four years.”
Daniels made his remarks as one of the three co-chairs of the Committee for a Responsible Federal Budget, a nonpartisan budget watchdog group. In a written letter and a panel discussion Wednesday, the group offered recommendations to Trump, who campaigned on proposals that the group estimated would add $5.3 trillion to the debt over the next 10 years.
Tax legislation will emerge next year as a compromise between the Trump team and congressional Republicans, who are expected to dial back the deepest Trump cuts, which the Committee for a Responsible Federal Budget has said would add $5tn to the national debt over the next decade.
The Committee for a Responsible Federal Budget (CRFB) on Thursday released an open letter to the incoming president urging him to take control of exploding spending levels — even if the stance runs counter to his lofty campaign promises. “Pay for your proposed initiatives and veto legislation that adds to the debt,” the group wrote in the sharply worded letter, which was unveiled at an event Thursday. “When you are in a hole, the first step toward getting out is to stop digging."
Trump has presented only a rough outline of healthcare reform proposals. The plan authored by House Speaker Paul Ryan, a Wisconsin Republican, offers a more detailed framework. But neither proposal provides enough details to estimate the impact to coverage, economic growth, or the budget, according to the Committee for a Responsible Federal Budget, an independent nonprofit group.
The president-elect’s pledges include tax cuts and spending $500 billion or more over a decade on infrastructure. His proposals would boost the nation’s debt by $5.3 trillion, the nonpartisan Committee for a Responsible Federal Budget estimated.
Trump has said he wants big tax cuts and more defense and infrastructure spending, among other things. His fiscal plans are estimated to add $5.3 trillion to the debt over 10 years, according to the Committee for a Responsible Federal Budget. That would push debt as a share of GDP to 105% by 2026, well above 86%, which is where it would be in a decade if no policies were changed.
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Personally, I'm not 100% convinced Trump will sign an Obamacare repeal law if Congress sends him one, because I'm not entirely sure he wants to repeal all of it. For all of the law's flaws, it has given insurance to many millions of previously-uninsured Americans, even by conservative estimates, and repealing it would kick an estimated 21 million of their coverage plans, according to the Committee for a Responsible Federal Budget.
For evidence of just how significant the fiscal policy shift could be for Republicans, consider the difference between the bottom lines of Mr. Trump’s campaign platform and the most recent House-passed budget outline. His tax cuts and spending policies would add $5.3 trillion to federal deficitsprojected over 10 years, according to the nonpartisan Committeee for a Responsible Federal Budget. The House budget would reduce deficits $7 trillion, mainly through deep reductions in projected spending for entitlement programs like Medicare, which Mr. Trump has been reluctant to embrace. That is a difference of more than $12 trillion.
Trump's economic plans are likely to kick inflation into high gear, and the central bank will have to react. His proposals would also boost the nation’s debt by $5.3 trillion, according to the nonpartisan Committee for a Responsible Federal Budget.
Adding to American debt: Trump's planned tax cuts and infrastructure spending may "substantially raise the deficit," SocGen said. Trump's fiscal proposals will cause the U.S. debt to soar to 105% of GDP by 2026, compared with nearly 77% today, according to estimates from the Committee for a Responsible Federal Budget.
The fiscal realities of what Trump is proposing, which the Committee for a Responsible Federal Budget warns would add trillions to the national debt, are unlikely to be considered until well after Inauguration Day, probably in March, when Congress must again consider the debt ceiling.
According to data compiled by the Committee for a Responsible Federal Budget, no president since Truman has inherited such a dire fiscal situation.
Congressional negotiators are relying on crude oil and Obamacare to break a year-long stalemate over how to fund the 21st Century Cures Act, a $6.8 billion package intended to boost medical research funding...
The bill would provide "dedicated funding in the future which is offset by other savings while keeping the spending subject to the oversight and review of the annual appropriations process," said Ed Lorenzen, senior adviser for the Committee for a Responsible Federal Budget, a nonpartisan think tank.
Lorenzen said the problem could occur after the extra money runs out in 10 years.
"Most of the offsets only achieve one-time or temporary savings, which are enough to cover the increased spending in the bill for 10 years," he said. "The bill only provides increased spending for 10 years, but the higher spending will be built into the baseline, creating pressure to continue the higher spending levels and a funding 'cliff' if it is not extended."
DEFICITS: This is the big potential showstopper for the Trump stimulus. The Committee for a Responsible Federal Budget estimates that Trump’s plans would add $5.3 trillion to the federal debt over the next decade.
When it comes to the market's price-earnings multiples – currently showing shares aren't cheap – higher bond yields share a historic inverse relationship, with periods of lower inflation coinciding with higher P/Es and vice versa. The bulls would argue that stocks might continue to make gains as the impact of stronger economic growth and earnings growth offsets the negative impact of higher yields.
But according to the nonpartisan Committee for a Responsible Federal Budget, Donald Trump's policies, that have got Wall Street so excited and the bond market so nervous, would increase US debt levels by more than $US5 trillion.