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PTrump's resident budget has been touted as a multi-billion dollar reduction of deficits, which the media is touting as a "deep" reduction in spending. In reality, its economies are mostly imaginary and heavily dependent on optimistic economic forecasts and vague promises to eliminate "waste, fraud and abuse".
Assuming much faster economic growth over the next decade than the Congressional Budget Office, the White House's Office of Management and Budget has been able to adopt much more optimistic assumptions about federal tax revenues. This made the budget calculations much better, which allowed the Trump team to avoid defining more detailed reforms.
More specifically, during the 2020 to 2029 window in question, the Trump administration assumes that the average annual economic growth would be about 2.9%, compared to 1.7% estimated by the CBO. To give an idea of its importance, this means that in 2029, at the end of the projection period, the White House expects the economy to exceed $ 4.1 trillion over what is assumed the CBO.
Although I am the last person in the world to say that the CBO is infallible, it is worth noting how much the OMB's assumptions depend on 10 years of strong sustained economic growth.
If you simply had to insert CBO's basic income assumptions into the Trump budget without changing anything, the budget would result in accumulated deficits of $ 10.1 trillion, canceling all of the $ 2.8 trillion reductions. deficit claimed by the Trump administration.
Encouraging economic forecasts also point to much smaller expenditures in proportion to the economy. For example, the budget proposes to increase defense spending by $ 510 billion. Yet, by the end of the decade, defense spending is expected to account for only 2.3 percent of GDP, compared with 2.5 percent in the baseline OC scenario, which implies lower defense spending. .
The budget makes changes that, if passed, would result in reduced spending, such as the recasting of the Obamacare and Medicaid goals to give more control to states and the addition of requirements. Medicaid and other public assistance programs that may reduce staffing levels.
But most other so-called "savings" are a mirage.
For example, the administration advocates a 5% reduction in non-defense discretionary spending, without specifying in detail the origin of such reductions.
Plus, although we're attacking the plan that would reduce Medicare by $ 845 billion, in reality, there is no clarity on how the Administration wants to achieve this goal. There are some adjustments to make to how Medicare pays for medications, such as changes to encourage the use of generics. But drug price reforms across the budget, which include modifications to other programs such as Medicaid, only represent a $ 69 billion reduction in the deficit, according to the government's own estimates. OMB calculations. The rest of the "savings" is tied to Washington's old reserve: a vague promise to reduce "waste, fraud and abuse".
There are no major structural reforms to Medicare that would place the program on a sustainable fiscal path.
CAMO Acting Director Russ Vought acknowledged it at a press conference on the budget.
"It does not reduce Medicare in this budget," Vought said. "What we are doing is proposing reforms that lower the price of medicines, because Medicare pays a very large share of the price of medicines in this country, it allows us to save money." , fraud and abuse, but Medicare spending will increase each year by healthy margins and there will be no structural change for Medicare beneficiaries. "
Trump's budget is not going anywhere in a divided government. But Democrats will use it to warn of draconian cuts, and Trump and his apologists quote him to say that he is seriously concerned about debt, while the real savings are imaginary. In short, this represents the state of political discourse on unsustainable federal debt.
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