(Washington Examiner) A nonpartisan government scorekeeper predicted on Thursday that President Trump’s proposed budget would slash the annual budget deficit, but would not lead to a balanced budget over the next decade as the White House said it would.
The Congressional Budget Office based its less-optimistic analysis of the Trump administration’s budget on “different economic forecasts” than those used by the White House. CBO analysts specifically rejected the administration’s rosy projections for economic growth over the next 10 years.
Trump’s team estimated that their budget would turn the federal deficit into a $16 billion surplus by 2027.
But while the CBO projected that Trump’s budget could cut the budget deficit by half within a decade, its analysis rejected the idea that the budget would balance or produce a surplus in that time frame. CBO said it projected economic growth would be much slower than the growth projected by the Trump administration.
“Nearly all of that difference arises because the administration projects higher revenue collections — stemming mainly from a projection of faster economic growth,” the CBO said.
“In particular, over the 2018–2027 period, CBO’s baseline projection of nominal GDP is about 6 percent lower than the administration’s,” it added. “That lower projection of nominal GDP is associated with lower projections of wages, profits, and revenues.”…