President Donald Trump has inherited a stable economy and a government that is on track to run a USD 559 billion budget deficit for the year, congressional analysts said on Tuesday.
The estimates from the nonpartisan Congressional Budget Office say the economy will hold relatively steady, with economic growth rising slightly to 2.3 per cent this year and unemployment averaging less than 5 percent for the duration of Trump’s term.
Trump is promising higher growth as his administration curbs regulations, overhauls the tax code, and repeals the Affordable Care Act, former President Barack Obama’s signature accomplishment.
The latest CBO figures are in line with previous projections. The deficit continues to be an intractable problem that would steadily worsen over time and CBO continues to warn that such rising deficits and debt “would have significant consequences” and act as a drag on the economy if left unchecked.
“After declining for several years, federal budget deficits are on a path to rise during the next decade,” the report says.
The projections come as Trump and Republicans controlling Congress are working to repeal much of President Barack Obama’s signature health care law, boost the Pentagon budget, and reform the loophole-cluttered tax code.
Balancing the budget would require crushing cuts to domestic agencies and big health programs like Medicare. Trump’s nominee to run the White House Budget office, Rep. Mick Mulvaney, R-S.C., testified before the Senate Budget Committee today morning.
His remarks offered few clues about the direction the new administration will take in tackling the deficit. Trump has made clear that he’s not interested in unpopular cuts to Medicare and Social Security, though reductions in the Medicaid program for the poor, disabled and elderly are being contemplated.
Obama inherited an economy in recession and deficits exceeding USD 1 trillion a year. Deficits moved lower over his two terms, registering USD 587 billion last year.