All White House budgets rely on somewhat rosy economic assumptions and some guesswork, but President Trump's fiscal 2018 $4.1 trillion budget plan "is unusually brazen in its defiance of basic math, and in its accounting discrepancies amounting to trillions-with-a-t rather than mere millions or billions," says Politico's Michael Grunwald. The blueprint purports to balance the federal budget within 10 years, but to get there the White House used some pretty creative math, economists say.
The first red flag is that it assumes average 3 percent growth over the next decade, rather than the 2 percent projected by the Congressional Budget Office and other forecasters. "If growth instead remained at 2 percent with no uptick in unemployment, projected deficits would widen by $3.1 trillion over the coming decade, according to Mr. Trump's budget," The Wall Street Journal says. The White House dismisses the 2 percent number as defeatist, saying Trump's proposed tax cuts and regulation-slashing will lead to at least 3 percent growth.
That's "fair enough if you believe in tooth fairies and ludicrous supply-side economics," says former Treasury Secretary Lawrence Summers in The Washington Post. But it also appears that Trump is counting $2.1 trillion in revenue twice — once from growth sparked by the projected tax cuts, and once to make those tax cuts revenue-neutral — which Summers says "appears to be the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them." Maya MacGuineas at the Committee for a Responsible Federal Budget agrees: "The same money cannot be used twice."
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White House budget officials pushed back on the double-counting charge, saying the $2.1 trillion isn't assumed to come from the tax cuts, because the tax overhaul — when the plan is finalized — will be deficit-neutral on its own, thanks to to-be-determined loophole-closing and deduction-limiting. Trump "is counting on unspecified tax increases to convert a plan that independent analysts believe will cost about $5.5 trillion in its current form into a plan that will cost nothing at all, and would somehow end up producing $2 trillion worth of deficit reduction through growth," translates Grunwald, skeptically.
There are some other accounting oddities, too; Binyamin Appelbaum at The New York Times points to the projected $300 billion in revenue from the estate tax, which Trump has promised to eliminate. The Wall Street Journal's Nick Timiraos notes that Trump proposes $200 billion in infrastructure spending while also cutting $95 billion from the Highway Trust Fund, which maintain's the nation's roads and bridges. You can get a brief overview of Trump's budget from CNNMoney below. Peter Weber
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