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Cmte. for a Responsible Federal Budget challenges Trump’s huge spending cuts

Committee for a Responsible Federal Budget President Maya MacGuineas said the following:

“President Trump’s first full budget was previewed tonight. [America First – A Budget Blueprint to Make America Great Again] The budget calls for $3.6 trillion of spending reductions and reforms over the next decade. The White House Office of Management and Budget estimates that under the President’s budget debt would decline from 77 percent of GDP today to below 60 percent by 2027, and deficits would disappear in that year. However, the budget relies on a number of very rosy assumptions….While we appreciate the Administration’s focus on reducing the debt, when using more realistic assumptions, the President’s budget does not add up. The budget balances on paper – and having a specific fiscal goal is an important first step. But it only achieves that goal by relying on incredibly rosy economic growth assumptions along with very aggressive and unrealistic future cuts while omitting a potentially extremely costly tax reform plan. If the Administration is serious about meeting the nation’s fiscal challenges, it will need to focus on structural reforms to our nation’s largest spending programs along with new revenue to finance them. Relying on heroic assumptions and vague promises instead of confronting tough policy choices will not fix our country’s fiscal woes….But to make the numbers work, the budget assumes 3 percent economic growth, which is unlikely to occur even in the best of circumstances. The budget also uses the entirety of the dynamic revenue from growth to pay down the debt – a move that we support but that is inconsistent with their past statements that economic growth would help pay for tax reform. The same money cannot be used twice. Furthermore, while the budget does put forward many serious and specific spending cuts, it also assumes some areas of spending – particularly non-defense discretionary spending – get to unrealistically low levels by the end of the decade. At the same time, too much of the pressure for cuts falls on too small a sliver of the budget. The President does not address two of our largest and fastest-growing programs – Medicare and Social Security old-age insurance. Promising to ‘protect’ these programs will ultimately hurt those who depend on these programs the most since reforms are needed to ensure solvency and sustainability. We hope that Congress and the President work together to build on the budget’s best policies and replace its gimmicks with thoughtful reforms to Social Security, Medicare, and the tax code. We need a full plan to fix the debt, not just wishes it away.”

See also the Washington Post –  How Trump’s budget helps the rich at the expense of the poor,” by Max Ehrenfreund: “Trump announced a tax overhaul that would reduce or eliminate trillions of dollars in taxes that are paid primarily by the wealthy, including the estate tax and the marginal rate on ordinary income paid by the richest taxpayers. He would lessen spending on Medicaid, the federal program that provides health insurance to the poor, by $1.4 trillion over a decade, and he would allow states to impose strict limits on other major anti-poverty benefits such as food stamps. “The budget also called for repealing President Obama’s health-care reform, which helped cover poor and middle-class households with funds raised in part through greater taxes on the rich. Republicans argue that Obama’s emphasis on the differences between rich and poor was misguided, and that policymakers should instead try to improve the fortunes of Americans across the board.”

See also TIME: President Trump’s Budget Includes a $2 Trillion Math Mistake – “President Trump’s budget includes simple accounting error that adds up to a $2 trillion oversight. Under the proposed budget released Tuesday, the Trump Administration’s proposed tax cuts would boost economic growth enough to pay for $1.3 trillion in spending by 2027. But the tax cuts are also supposed to be revenue-neutral, meaning that trillion dollars is already supposed to pay for the money lost from the tax cuts…”

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