CRFB Reaction to the President’s Joint Address to Congress

Yesterday, President Trump laid out his economic and other policy priorities in his first address to a joint session of Congress of his second term. In addition to outlining his policies regarding extensions of the expiring provisions of the Tax Cuts and Jobs Act; removal of taxes on overtime, tipped income, and Social Security benefits; and other campaign promises, he stated, “In the near future, I want to do what has not been done in 24 years: balance the federal budget. We are going to balance it.”

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget: 

The President’s statements about wanting to balance the budget can be taken in two ways: one as a positive acknowledgement of the need to prioritize fiscal responsibility; or the other, a claim at utter and complete odds with fiscal reality and the policies he is promising.  

Troublingly, America's fiscal imbalances have grown so large that balancing the budget is likely out of reach in the medium term. It would take nearly $17 trillion in ten-year savings to balance the budget by 2035. For context, the largest savings package in the past dozen years, the Fiscal Responsibility Act, saved $1.5 trillion over a decade.  

Fiscal goals are more effective when they are aspirational, yes, but more importantly, reasonable and achievable as well. With our national debt on course to reach its highest share of the economy we’ve ever seen, we urgently need solutions to match the rhetoric. One reasonable goal proposed by the Treasury Secretary is to bring the deficit down to 3 percent of GDP. This requires $7.5 trillion of savings over ten years, and while aggressive, it is doable if Congress starts immediately and scours all parts of the budget, including both spending and taxes. But taking Social Security and Medicare off the table, which the President has previously promised, would make this much more difficult, and extending the tax cuts and adding his campaign agenda would make the problem $5 to $11 trillion worse.

Exaggerated claims about economic growth will not fill the gap. Proponents of counting on sustained growth to wipe away big chunks of the deficit are relying on assumptions that are many multiples higher than all credible estimates.

Our fiscal hole has grown dangerously large. It now threatens American households, the US economy, future generations, and even our national security. Dealing with these fiscal challenges will require acknowledging the trade-offs, rejecting free-lunch theories, and pursuing bipartisan efforts to make some of the long-overdue hard choices.  

We applaud the goal of improving the fiscal situation, but it does no good and serves as a distraction unless it is backed with achievable metrics and a real plan. Congress should make deficit reduction its number one fiscal goal and put in place a comprehensive debt deal to boost long-term economic growth and control our dangerous and growing national debt.  

###

For more information, please contact Matt Klucher, Assistant Director of Media Relations, at klucher@crfb.org.