Today’s CBO Report Makes Clear Just How Far the President’s Budget Is from Balance
For Immediate Release
Today, the Congressional Budget Office (CBO) released its own estimate of the President’s Fiscal Year (FY) 2018 budget. While the budget itself claimed to balance by 2027 and reduce debt in that year to below 60 percent of Gross Domestic Product (GDP), CBO estimates the budget results in a $720 billion deficit in 2027, with debt in that year reaching 80 percent of GDP.
CBO’s estimates differ from those in the budget in a number of ways, but most significantly when it comes to economic growth. CBO’s estimates assume average real annual growth below 2 percent – well within mainstream estimates – while the Office of Management and Budget (OMB) assumed growth of almost 3 percent per year. While CBO’s headline estimates do not account for the possible growth impact of the budget itself, the agency estimated that they would be small, changing debt in the final year by 1 percentage point.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the following in response to CBO’s analysis:
Today’s CBO report makes clear just how far the President’s budget is from balance, and just how hard it is to fix the debt without addressing the growth of Social Security and Medicare, the nation’s two largest spending programs.
CBO’s analysis shows the President’s claim of a balanced budget is built on a house of cards, reinforced by economic growth rates that are far outside of the mainstream consensus and would be unprecedented given today’s demographic realities.
We cannot just close our eyes, wish upon a star, and halt the aging of the workforce. To get even halfway to the President’s growth assumptions will require good luck along with an aggressive combination of tax reform, regulatory reform, immigration reform, entitlement reform, and deficit reduction – all five of which are largely absent from the President’s budget.
As much as we would like to fix the debt with a wave of a magic wand, it is just not that simple. Righting our fiscal ship will require tough choices, especially when it comes to taxes and entitlement spending. The President’s budget, unfortunately, has yet to confront those choices.
###
For more information contact Patrick Newton, Press Secretary, at newton@crfb.org.
