The Committee for a Responsible Federal Budget predicted Thursday that an independent analysis of the president’s budget “will show much higher deficits and debt as a percent of Gross Domestic Product” than the White House estimates.
The Congressional Budget Office produces its own estimate of the president’s budget, typically about a month after the White House publishes its proposal. CRFB says it expects the congressional budget scorekeeper’s analysis will use more realistic economic assumptions than the White House’s rosy projection for average growth of 3 percent a year over the next decade. “More realistic economic projections both reduce projected GDP in 2028 by 11 percent, which raises debt as a percent of GDP by 8 percentage points, and reduce revenue enough to raise debt another 10 percentage points,” the group says.
CRFB adds that CBO will also factor in the budget deal that Congress recently passed, which calls for hundreds of billions of dollars in increased spending over two years, and make other adjustments. All together, CBO’s accounting could end up showing debt climbing to 93 percent of GDP by 2028, or 20 percentage points higher than the White House budget forecasts.
CRFB adds that, if nearly $1 trillion worth of unspecified spending cuts over the next decade fail to materialize as anticipated in the budget, the debt-to-GDP level could reach 96 percent. “Either of these numbers would be an improvement on our estimate of current law, which has debt reaching 101 percent of GDP by 2028, but they would still leave debt on a sharp upward path,” CRFB says.
We should add one caveat here: These are only projections of what CBO’s numbers might look like, and those CBO numbers will themselves be estimates about a White House budget that will never be adopted as a whole. But the bottom line remains that we’re likely looking at lots more red ink ahead, and the administration’s forecasts will probably be deemed unrealistically optimistic by impartial analysts.