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."
CBO officials told reporters on a conference call Thursday that there was "not enough detail" in many of the White House's proposals to conduct a thorough macroeconomic analysis.
Trump's budget calculations relied on an assumption that his policies would lead to 3 percent economic growth. But the CBO estimated that the president's budget would only grow the economy by 0.1 percent, which would still keep the economic growth rate under 2 percent.
The CBO report Thursday did not provide all bad news to the White House, however. CBO analysts estimated Trump's budget could reduce deficits by more than $3 trillion by 2027.
The Office of Management and Budget touted the CBO's deficit reduction projections Thursday, claiming it was the most dramatic cut to the deficit ever scored by the CBO.
"We are thrilled that CBO confirms that the president's proposed Budget resulted in the largest deficit reduction they have ever scored," said Meghan Burris, an OMB spokeswoman. "CBO agrees that this is the largest deficit reduction package in American history. This administration is committed to making the necessary investments to restore our military, secure our borders, and modernize our infrastructure."