Trump budget chief defends plan in face of opposition

Raquel Nash
May 25, 2017

"Apparently, the budget forecasts that USA economic growth will rise to 3.0 percent because of the administration's policies - largely its tax cuts and perhaps also its regulatory policies". This is an elementary double count. "At least you can not do so in a world of logic", wrote Summers, the 71st United States Secretary of the Treasury from July 1999 until January 2001. "This error is akin to buying a company assuming that you can make investments that will raise profits, but then, in calculating the increased profits, counting the higher revenue while failing to account for the fact that the investments would actually cost some money to make", he wrote.

However, one of the most respected economic minds of modern times begs to differ.

The budget, Trump's first as president, combines his spending plan for the upcoming 2018 fiscal year with a promise to balance government books after a decade, relying on aggressive cuts, a surge in economic growth — and a $2 trillion-plus accounting gimmick. "Three percent, in my opinion, is minimal", Kudlow told CNBC.

"I have news for you, both parties: if we do not get to 3 percent growth, it is unlikely we will ever balance the budget again", he said.

Congress must act to increase the debt limit to avert a first-ever, economy-rattling default on US obligations like bond payments.

"While providing a path toward a balanced budget and increasing support for our military is commendable, neither can be done overnight, nor by eliminating programs that directly benefit the commonwealth", U.S. Rep. Glenn Thompson, R-Pa., said.

But published reports put the scope of those cuts at $3.6 trillion over a decade, including $800 billion cuts to Medicaid funding in that span, a $1.92 billion cut from food stamps and a $38 billion reduction to farm subsidies, as well as cuts to student aid, science funding and more.

"It sends all of the right signals for the first time in almost a decade - a budget that actually is focused on the best interests of the American taxpayer rather than what's popular in Washington", he said. "We stand by the numbers".

"The measure of success is not how much cash or government or welfare assisted", Kudlow said.

The New York Times analyzed Trump's budget, and found it targets programs that tend to spend more on women than men.

The White House said numerous proposed cuts were aimed at ineffective programs and that the savings were needed to help balance the budget in 10 years and finance increased spending for defense and other programs.

"How pessimistic do you have to be to assume that 3 percent growth, which is less than the historical average going back to the founding of the country and the end of World War II, that that's unreasonable?" he asked his critics. "Obamacare provided the break-even working poor with incentives not to work". Ron Wyden of OR, ranking Democrat on the committee that oversees health care financing.

Mulvaney is the driving force behind the Trump budget plan, winning the president's approval for big cuts to benefit programs whose budgets are essentially on autopilot. Mulvaney falsely claimed that no person who "really needs" assistance will be removed from the programs, and turned to Trump's proposed new restrictions to the Supplemental Nutrition Assistance Program (SNAP), commonly known as "food stamps", as an example. "And we will have a great debate about the details on how to achieve those goals".

Senate Majority Leader Mitch McConnell told reporters the blueprint will be taken into consideration but won't determine the final outcome.

One of the best ways to evaluate government spending is as a proportion of the total economy, since that can help to account for changes in population, inflation and the budget priorities that define a presidency.

Other reports by TheDigitalNewspaper

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