Over the next 10 years, the cumulative deficit under the President’s proposals would be $2.9 trillion less than the $12.4 trillion in CBO’s baseline. The deficit would average 3.7 percent of GDP, CBO estimates.
On February 12, 2018, the Administration submitted its annual set of budgetary proposals to the Congress; subsequent amendments were transmitted on April 13. In this report, CBO examines how budgetary outcomes under those proposals would compare with CBO’s adjusted baseline budget projections. (Those projections extend from 2018 to 2028 and are based on the assumption that current laws regarding federal spending and revenues will generally remain in place.)
According to CBO’s analysis, the Administration’s proposals would have the following effects:
Federal debt held by the public would equal 86 percent of gross domestic product (GDP) in 2028 under the President’s budget, compared with 96 percent that year in the agency’s baseline and about 78 percent this year.
The federal deficit would be $2.9 trillion smaller under the President’s budget than in CBO’s baseline during the 2019–2028 period, CBO estimates. By contrast, the Administration estimates that the deficit would be $5.2 trillion smaller than the baseline amount during that period.
The two largest changes over the 2019–2028 period would be a $2.1 trillion reduction in nondefense discretionary spending (excluding that designated for overseas contingency operations, or OCO) and a $1.3 trillion reduction in mandatory spending for health care.
CBO conducted this analysis in collaboration with the staff of the Joint Committee on Taxation (JCT). The analysis is based on CBO’s economic projections and both agencies’ budget estimates, rather than on the Administration’s. Because of the analytical challenges created by the recent enactment of major legislation and the limited time available since then, the agency has not incorporated the macroeconomic effects of the President’s proposals in this report and does not plan to do so this year. Moreover, some of the Administration’s proposals were not specific enough for CBO and JCT to make their own estimates of the effects on the budget.