Trump's budget proposal relies on highly unlikely expectations
President Trump is expected to double down on big spending and tax cuts when he releases his budget proposal for fiscal year 2021 later today.
The big picture: The budget proposes increases in defense spending and other categories and also assumes the annual budget deficit will fall from more than $1 trillion in 2020 to around $200 billion, largely as a result of increased U.S. growth.
- The budget projects 3% growth every year for the next 15 years, even though annual GDP has not grown by that amount during Trump's presidency and last hit that growth rate 15 years ago.
- The growth projection is about double the CBO's expectation for growth during that time period.
Between the lines: Trump's budget also proposes to cut spending by $4.4 trillion over the next 10 years. Of that, it targets $2 trillion from mandatory spending programs, which would require action from Congress.
- Trump proposes to cut EPA spending by 26%, the Department of Housing and Urban Development’s budget by 15%, the Commerce Department by 37%, foreign aid by 21%, and the CDC by 9%.
Reality check: Presidential budget proposals rarely, if ever, reflect actual spending. However, the proposal does provide insight into the Trump administration's policy priorities.
What they're saying: Vice President Mike Pence suggested in a Friday interview with CNBC that the debt and deficits are not a primary focus of the administration.
- "The president came in and said first and foremost we have to restore growth," he said. "That's how we'll deal with the long-term fiscal challenges facing our country."