President Trump’s first full budget was unveiled yesterday. It has the worthy goal of reducing the national debt as a share of the economy, but how it gets there needs more work.
We highlighted What President Trump’s First Budget Gets Right and Wrong.
“President Trump’s fiscal year 2018 budget is titled, ‘A New Foundation for American Greatness.’ There are some good ideas, but more concrete details will need to be filled in to make this a solid basis for fixing the debt.”
While the budget includes the critical goal of reducing the national debt as a share of the economy, it uses overly optimistic estimates for economic growth and lots of unspecified savings to get there. Although it identifies some concrete ideas for reducing the deficit, much more is needed and it leaves the biggest drivers of the debt off the table. Finally, more details and consistency are needed regarding how tax reform will affect the debt. See a more detailed analysis of the budget.
Just ahead of the budget release, Campaign to Fix the Debt Co-Chairs Judd Gregg and Ed Rendell offered advice that remains relevant:
The President entered office facing the highest national debt as a share of the economy since World War II. But unlike then, the debt is not headed down—it is projected to grow faster than the economy indefinitely. Trillion-dollar annual deficits will return by 2023, and the total debt will eclipse the size of the entire economy by 2033.
When President Trump took office, it was projected the debt would grow by two-thirds over the next ten years. We can do and must do better.
Our nation needs a plan to correct this course, and we urge President Trump to pursue a legacy of fixing the national bottom line once-and-for-all, not one that adds so much to the debt that it dogs the economy for a generation.
The President is right to focus on job creation and tax reform. But he should not rely on unrealistic and rosy economic growth projections to pay for his proposals or fix our debt. It is not a good idea to spend as if you won the lottery in hopes that you actually do.
The budget should put the debt on a downward path so that it is not growing faster than the economy, and it should have concrete solutions to address the core drivers of the debt.
We cannot fix the problem by looking at only the discretionary side of the budget, a smaller slice of the pie that accounts for only 31 percent of federal spending. Social Security and Medicare make up 39 percent of the budget and will account for 51 percent of spending growth over the next ten years.
The next step is for Congress to agree on a budget blueprint. Lawmakers should build on the positive elements of the president’s budget and fix the negative ones. If you haven’t already, write Congress today to start fixing the debt through a strong budget and responsible reforms.
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