Kudlow Rejects CBO Projections About Trump Tax Cuts...Offers His Own Prediction

Kudlow Rejects CBO Projections About Trump Tax Cuts...Offers His Own Prediction

Kudlow Rejects CBO Projections About Trump Tax Cuts...Offers His Own Prediction

The Republican tax plan and increased government spending will provide a temporary boost to the economy but sharply increase the federal deficit, sending it above $1 trillion a year in 2020, two years earlier than previously projected, according to estimates released Monday by the Congressional Budget Office. From 2018, budget deficits will have risen by 5.1 percent in 2022, a trend only exceeded by five previous years (four during the 2007 to 2009 recession). But House Republicans scheduled a vote later this week on adding a balanced budget amendment to the Constitution, which could force some fiscal restraint.

But the flurry of new law is which makes it hard for Republicans to keep on blaming President Barack Obama along with Democrats to its federal government's fiscal condition.

"That amount is far greater than the debt in any year since just after World War II", CBO said, adding that the debt is now about 77 percent of GDP, a measure of the size of the economy. "The CBO's latest report exposes the scam behind the rosy rhetoric from Republicans that their tax bill would pay for itself", Schumer said in a statement. It warns that interest rates on government borrowing will spike, with the benchmark 10-year Treasury note, now yielding 2.8 percent, will average a 3.0 percent interest rate this year and 3.7 percent next year. They're expected to remain near 21% of GDP over the next three years, then grow more quickly, topping 23% of GDP by 2028.

Economic growth will climb to 3.3 percent this year thanks to the fiscal stimulus from tax cuts and increased spending, but will fall to 2.4 percent in 2019 and 1.8 percent in 2020. But if Mr. Trump gets his way and Congress makes the tax cuts permanent, then the fiscal picture could be even worse. "In their craven haste to give corporations and the wealthiest 1% massive tax breaks, Republicans saddled our children and grandchildren with trillions of dollars of debt".

Members of both parties further added to the deficit in March when they increased military and domestic spending by almost $300 billion over the next two years.

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The government would borrow about 19 cents of every dollar it spends this year. By 2020, when Mr. Trump is up for re-election, that will be 22 cents.

"Anyone who argues this course can continue is living with blinders", said Campaign to Fix the Debt Co-chairmen Judd Gregg, a former GOP senator, and Ed Rendell, a former Democratic governor.

"The sun rises in the east, and tax cuts result in less revenues".

"The budget outlook is no reason for alarm", wrote Paul N. Van de Water, senior fellow at CBPP.

His formal budget proposals have been far harsher, but the Republican-led Congress has pushed against his proposed cutbacks due to their political unpopularity and the need to attract Democratic votes in order to pass any plan.

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