WASHINGTON DC (February 10, 2020) — President Trump released his budget for Fiscal Year (FY) 2021, outlining his tax and spending agenda over the next decade. Under the budget’s own estimates, debt would fall from 81 percent of the economy in 2020 to 66 percent by 2030 assuming the enactment of the President’s policies. However, these estimates rely on rosy economic and policy assumptions – including the assumption that the economy will grow about 50 percent (or 1 percentage point) faster than most forecasters estimate.See our preliminary summary and analysis here.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
I’m glad the President’s budget aims to put debt on a downward path and proposes some important policy reforms to help achieve that goal. But when you peel away the rosy-growth assumptions, the assumed reversal of spending increases the President has already signed into law, and the exaggerated and unspecified savings, we are still left with a mountain of debt.
Actions speak louder than words, and over the past three years, the President has signed $4.7 trillion of new debt into law. Digging our way out of that hole will require tax and spending changes far greater than what the President has proposed here.
I hope this budget is a turning point. The budget includes a number of thoughtful policy improvements, especially in the Medicare space, and policymakers could use it as a starting point for bipartisan efforts to lower health care costs, improve tax-compliance, reduce waste, and enact other reforms.
We don’t need more false promises about rapid economic growth or tax-cuts that will pay for themselves. We need action to reverse our trillion-dollar deficits, save our largest trust funds, and prevent debt from reaching new record highs.
Frankly, budgeting has become pretty much a joke in this country, where budgets are used as messaging documents and an excuse to trade insults. This year’s trillion-dollar deficit should cause us to re-think this dynamic. The President and Congress should work to agree on national priorities and sound plans to pay for them. Sure it sounds like a pipe dream, but in the world’s largest economy, it should be a given.
See our preliminary summary and analysis of the President’s budget on our blog. A full paper will be released later today.
