U.S. spending plan will cut deficit but not balance budget, says CBO
The 2018 fiscal year budget, unveiled in May, put numbers on Trump's vision of a government that would boost military spending while radically cutting assistance to lower-income Americans.
The annual budget deficit in 2027 would be about $720 billion under Trump's proposal, the CBO said in a report, not eliminated as promised by the White House, which has projected a $16 billion surplus.
The CBO estimated that Trump's budget would cause the federal budget deficit to shrink relative to the size of the economy over the next 10 years, ranging between 2.6 percent to 3.3 percent of gross domestic product during that period.
The cumulative federal deficit would be one-third smaller than CBO baseline projections that show deficits rising to 5 percent of GDP by 2027, the CBO said.
The CBO said the Trump budget's deficit reduction over the next decade would be lower than the White House projects due to lower estimated revenues and slower economic growth than assumed by the administration.
The CBO said did not take into account all of Trump's proposals that may affect the economy because "the details on many of the proposed policies are not available at this time."
The administration's tax reform proposal, for example, "lacked the specificity necessary to evaluate any effects," the CBO wrote.
The deficit reduction created by Trump's budget proposal would result from lower spending over the next decade, the CBO said.
The White House blueprint would cut $2 trillion in mandatory spending, including $1.9 trillion on healthcare. ■