WASHINGTON, March 11, 2019 /PRNewswire/ -- The Concord Coalition said today that President Trump's proposed 2020 budget does not provide a realistic plan for the coming fiscal year and -- even worse -- fails to lay out a credible path to fiscal sustainability.
"In the short term, the president's budget is a roadmap for another government shutdown," said Concord's Executive Director Robert L. Bixby. "The combination of deep spending cuts for non-defense programs and a large increase in defense spending, assisted by a blatant gimmick to avoid existing budget caps, has the potential to induce congressional gridlock on Fiscal Year 2020 appropriations. Over the longer term, the budget's purported success at reining in the growing debt relies upon very rosy economic assumptions and improbable spending cuts, mostly targeted at portions of the budget that are not projected to see the fastest growth."
"What's remarkable is that even with all of its favorable assumptions, the president's plan would not produce a balanced budget until 2034," Bixby added.
The budget is based on economic growth assumptions that are considerably higher than most other forecasts, with the administration projecting inflation-adjusted GDP growth at 3 percent or above through 2024. This helps to produce a substantial boost in assumed revenue. In fact, the administration is projecting individual income tax revenues higher than the Congressional Budget Office (CBO) baseline, which assumes that the individual income tax cuts from 2017 expire.
On the spending side of the budget, the largest proposed savings come from non-defense appropriations which make up roughly 16 percent of the budget and are already projected to shrink relative to the economy. Under the president's budget, this category would be reduced by more than $1 trillion over 10 years. Nothing in recent experience would suggest that cuts of this magnitude are anywhere near likely to be enacted.
Trump's budget calls for a hefty boost in defense spending by way of Overseas Contingency Operations (OCO) funding. Such funding, which does not count against previously legislated spending caps, is supposed to be used for conflicts abroad.
The budget proposes to spend above defense spending caps over the next two years by increasing OCO funding from $69 billion this year to $165 billion in 2020 and $156 billion in 2021.
"Administration officials aren't even bothering to pretend that all of the additional war funding is actually going to be used for conflicts abroad," Bixby said. "OCO funding has long been used as a way to slip some extra money into the Pentagon, but Trump's new budget plan takes this to an entirely new level. It is over the top. The administration's bizarre explanation is that the 'only fiscally responsible way' to avoid 'unaffordable' increases in spending caps is to circumvent them."
As far as the country's longer-term fiscal challenges, Trump's new proposed budget -- like its predecessors in 2017 and 2018 -- reflects little real interest in the hard work of unwinding the structural issues that drive federal spending projections higher than revenues: population aging, rising health care costs and an inefficient tax code.
Unless we want to see an endless string of trillion-dollar-plus federal deficits, elected officials should take a hard look at the nation's priorities and reach agreement on reasonable spending caps that can be enforced both on defense and domestic spending.
But that alone won't be sufficient. Washington must also reform the major federal benefit programs and revisit the tax code to better align projected spending and revenues in a realistic and sustainable way.
The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility. Since 1992, Concord has worked to educate the public about the causes and consequences of the federal deficit and debt, and to develop realistic solutions for sustainable budgets. For more fiscal news and analysis, visit concordcoalition.org and follow us on Twitter: @ConcordC
SOURCE The Concord Coalition