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Feb. 10, 2020, 2:31 p.m. EST

Trump’s latest plan will make a ‘big dent’ in deficit, White House budget office claims

Outside expert decries that ‘budgeting has become pretty much a joke in this country’

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By Greg Robb, MarketWatch

President Trump’s budget proposal, due to be released Monday, predicts the deficit falling below $1 trillion at the end of fiscal year 2021.

President Donald Trump’s most recent budget will make a “big dent” in the federal budget deficit, and put the U.S. on the path toward a balanced budget, says Russell Vought, the White House’s Office of Management and Budget acting director.

“We believe we can make a big dent and get back in the realm of fiscal responsibility,” Vought said Monday in an interview on CNBC.

The Trump plan will focus on “good government reforms” to help balance the budget in 15 years, Vought said.

The Trump budget plan was released Monday afternoon. It calls for $4.4 trillion in spending cuts.

Read: Trump proposes steep cuts to social-safety-net programs and hikes for defense

The proposal sees the deficit falling below $1 trillion at the end of fiscal year 2021. It would fall to $200 billion at the end of 10 years and hit balance five years later.

Vought defended the administration’s forecast of 3% GDP growth over the next 10 years, which some economists have called too rosy.

Vought said the higher growth rate comes because the budget assumes the enactment of an infrastructure bill and other trade deals.

“We believe 3% [growth] is entirely possible to be able to hit in the next 10 years,” he said.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the Trump plan includes “rosy” growth assumptions, “exaggerated and unspecified savings,” and “the assumed reversal of spending increases the President has already signed into law.”

Stripping out these factors, “we are still left with a mountain of debt,” MacGuineas said, in a statement.

“Frankly, budgeting has become pretty much a joke in this country, where budgets are used as messaging documents and an excuse to trade insults,” she added.

White House officials have talked recently about the need to cut discretionary spending.

Treasury Secretary Steven Mnuchin has said that the White House only accepted higher spending on domestic programs during his first term so that Congress would agree with White House priorities to boost military spending.

Mnuchin and other administration officials have also begun to talk about the need for another tax cut during the second term. Vought said that there was $1.4 trillion allocated for a second tax cut.

The Congressional Budget Office warned last month that under current law there will be $1 trillion annual deficit as far as the eye can see. They projected the U.S. national debt would rise to $31.4 trillion by 2030, or 98% of GDP, the highest since the end of World War II.

Democrats were quick to criticize the budget proposal.

Speaker of the House Nancy Pelosi said the Trump budget plan shows “how little he values the good health, financial security and well-being of hardworking American families.

The S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.30% and Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.20% were trading modestly higher Monday afternoon.

-11.63 -0.30%
Volume: 2.12B
June 27, 2022 5:12p
US : Dow Jones Global
-62.42 -0.20%
Volume: 313.93M
June 27, 2022 5:12p

Greg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000.

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