Debt and Deficits

Trump's Budget Would Add $7.9 Trillion to the National Debt Over the Next Decade

And the real outcome is likely to be worse, since the budget relies on overly rosy assumptions about future economic growth.


Keegan Barber/ZUMA Press/Newscom

Page 1 of President Donald Trump's proposed budget boldly promises to tame America's runaway national debt, which recently surpassed $22 trillion and continues to grow.

"My 2020 Budget builds on the tremendous progress we have made and provides a clear roadmap for the Congress to bring federal spending and debt under control," Trump writes in a message to Congress that serves as the introduction to the budget plan. "We must protect future generations from Washington's habitual deficit spending."

Unfortunately, most of the rest of the 150-page budget undermines the opening salvo. Trump's budget relies on "accounting gimmicks" long popular with both parties, such as using overly rosy economic projections to make an end-run around budget caps that his fellow Republicans once championed. The proposed budget would run trillion-dollar deficits in each of the next four years, and would take 15 years to balance—even with the optimistic assumptions about future economic growth—five years longer than the Trump administration's first budget promised.

The budget proposal released Monday also puts to bed the question of whether Trump can keep his campaign promise to eliminate the national debt in eight years.

Indeed, under the projections included in the budget plan, the country would run a deficit of $631 billion in 2025 (which would be Trump's eighth budget, if he remains in office that long)—hardly smaller than the $666 billion deficit in the final fiscal year of Preisdent Barack Obama's time in office.

Source: The White House

Over 10 years, Trump's budget would add more than $7.9 trillion to the national debt.

The real outcome is likely to be much worse than the estimates provided Monday by the White House. That's because Trump's budget assumes 3 percent annual economic growth for the next decade, a figure that's well in excess of what most economists expect. The Federal Reserve, for example, projects 2.3 percent growth over the next year.

Without those overly rosy assumptions, the national debt would likely be $2 trillion higher by 2029, according to an analysis by the Committee for a Responsible Federal Budget (CRFB), a nonpartisan group that advocates for balanced budgets. The group says the budget is likely to add about $10 trillion to the national debt by 2029.

"President Trump's budget aims to reverse an unsustainable fiscal situation and put debt on a downward path relative to the economy," says Maya MacGuineas, president of the CRFB. "Unfortunately, as in previous years, he relies on far too many accounting gimmicks and fantasy assumptions and puts forward far too few actual solutions."

The latest projections from the Congressional Budget Office assume lower levels of future revenue than the Trump budget does. As a result, the CBO does not expect the deficit to decline during the next decade, and expects that it will reach $1.3 trillion annually by 2029.

While likely exaggerating future economic growth, Trump's budget also overstates the likelihood of achieving reductions in domestic spending.

Perhaps the best example of unrealistic spending cuts are the $660 billion in savings that the budget assumes would come from repealing and replacing Obamacare—a policy that couldn't get through Congress when Republicans controlled both chambers and seems virtually impossible now that Democrats hold the House. Already, Democrats are slamming Trump's budget for the non-defense discretionary cuts the administration has proposed.

Worse, Trump's budget attempts to hide spending increases for the Pentagon by moving those new funds into off-the-books accounts originally meant to pay for America's foreign wars. The administration says it wants to tackle wasteful spending in welfare and other domestic programs, but there's plenty of wasteful spending at the Pentagon, too. It's hard to take the president's calls for belt-tightening seriously when the cuts only apply to some parts of the federal budget.

Balancing a budget that's $22 trillion in the red is not easy, of course, but the first requirement should be to stop making matters worse.

"The nation has never been in such a troubling fiscal situation," writes Chris Edwards, director of tax policy studies at the Cato Institute, a libertarian think tank. "Federal debt is soaring even after a decade of economic growth. Debt is imposing a rising cost that burdens all of us. Politicians have always had incentives to spend, but never before has Washington been so irresponsible."

Trump's budget also calls for the extension of the 2017 tax cuts, which are currently expected to expire in 2025. As Edwards points out, the budget could balance within 10 years—even with lower expected revenues by keeping the tax cuts in place—if annual spending growth was restrained to 1.8 percent.

That's a reasonable figure. Too bad this budget ignores it.

NEXT: Does Prosperity Trigger Calls for Socialism?

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  1. The good news is that Pres. Trump’s budget proposal is largely irrelevant in the reality-based world.

    1. The DEBT is not the DEFICIT. And the DEFICIT is not the DEBT. They are separate problems.

      Government BORROWING drives up the debt, not government SPENDING.

      The solution to our debt problem is simple: STOP ISSUING DEBT-BASED MONEY! Begin issuing pure “unbacked” fiat money to fund the deficit, rather than going further into debt. The inflationary impact of unbacked dollars is no worse than the inflationary impact of the same amount of debt-backed dollars. Issuing unbacked dollars will halt the increase in the national debt and its crushing $430 billion in annual interest. Paying off part of the maturing debt each year and rolling over the rest will eventually bring the national debt (and its taxpayer-financed interest payments) down to zero. See .

      1. So, by your reasoning, why wouldn’t we just issue enough fiat money to “pay off the debt” immediately? Answer: Because the currency would become worthless, since there would be no reckoning for unlimited spending. We would become Zimbabwe, with $100M notes and 60,000 percent inflation. There has to be some accountability for spending, whether it’s raising taxes or borrowing, or the currency has no real value.

        1. In theory we could pay off each bond or treasury bill as it matures. In practice this would not be a good idea, as it would risk introducing too much cash into the economy at one time. Paying off part of the maturing debt gradually and rolling over the rest makes more sense. Such a program would remove a huge burden from the U.S. economy, as it would require no extended period of forced austerity and no tax increases.

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    3. As were all of Obama’s budgets. Many of which were unanimously rejected.

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  2. “We must protect future generations from Washington’s habitual deficit spending.”

    Oh, they’ll ignore that shit just fine.

  3. Have I mentioned how much I hate Glenn Greenwald? Here he is seizing on Pelosi’s comments that she’s not yet ready to impeach:

    If Trump is literally controlled by Putin to the point where Trump is forced to act in the best interests of Russia *at the expense of the US* – which has been the prevailing claim not of Dem fringes but its mainstream – how can it be morally justified not to impeach him???

    Such a weak argument. Mueller still hasn’t submitted his final report. Once he concludes his exhaustive investigation, THEN the #BlueTsunami Congress will pursue impeachment.

    1. Indeed. After the Mueller report the entire US will be of one mind on this.

    2. Do you play Hillary Monopoly?
      Luckily all the cards are “get out of jail free”.

    3. The short answer is Republicans control the Senate. Impeachment requires thst we all basically agree that Trump sold out to Putin for personal enrichment.

      1. “Impeachment requires thst we all basically agree that Trump sold out to Putin for personal enrichment.”

        Which is a fantasy believed by many imbeciles.

  4. Good thing Congress controls the purse and will spend far more than Trump proposed in his FY2020 proposal.

    1. Sadly, you’re right and that should be the real story.

  5. Since there’s no way we’re ever going to pay off the debt, why not just enjoy this and run up the credit cards until we’re shut off? As long as the rest of world is willing to keep sending us free stuff that we’ll never pay for, why tell them to stop? What’s the downside of partying until THEY say no?

    1. The crash is a lot worse.

      1. In a world of fiat currencies he who defaults last, wins.

  6. My back of the envelope calculation says that $7 Billion over a decade comes out to $40 per American per week. If I recall correctly, around half of Americans work, so that’s $80 per week per working American over the course of a decade. Basically, we would have to go back to the 6 day work week to make ends meet at this point. It makes more sense to cancel the debt and let treasury holders take the hit. With the national debt in the Trillions, solvency is a lost cause.

    1. That would be the worst solution possible. Because it would mark the end of the US Dollar as the world’s reserve currency. A status that allows the US to effectively tax everyone who holds anything of value denominated in US dollars.

      The real issue is when the costs associated with this process exceed the cost of making any necessary exchange to another medium of value. All those pallet loads of US Dollars out in the world are a huge anchor on that process.

  7. The climate change nonsense and the national “debt” issue share the same narrative beats.

    OMG! It’s gonna destroy us all!

    –decades pass of nothing bad happening–

    OMG! It’s gonna destroy us all for real now!!

    –nothing continues to happen–

    Why won’t you people listen?!

    –still nothing–

    Any day now! Any day now we’ll see hyper-inflationary climate change! (Or hyper-changing climate inflation)


    The total in Treasuries is what money the US federal government has created and spent into the economy over the years and is held there by people, either individuals or representatives of organizations, that have not better use to put the money.

    The “debt” is inert, it causes no harm. No one person is on the hook to pay it back and the Feds will always be able to create the money to pay the interest regardless of how much the interest is.

    Stop worrying about it as a whole. Worry about the specific things the money is spent on. That is what the money is paying people to do. Like prosecuting the drug war. Like propping up tyrants, like paying people to promulgate and enforce counter-productive regulations and so on.

    1. Even worse than the “climate change nonsense” is the spherical earth nonsense. The earth is flat and we all know that, just like we know climate change is a liberal, academic conspiracy. Just like we know there is magical man in the sky.

    2. Except for one small difference — the debt crisis really will end in disaster.

      What’s the harm? Depends if you’re sitting on a bunch of debt, or a bunch of cash. With hyperinflation, people who owe money earn enough before breakfast to pay it back. People who were responsible and saved all their lives have enough to buy a cup of coffee.

    3. the Feds will always be able to create the money to pay the interest regardless of how much the interest is.

      Yes, and they’ll do that by making the dollars smaller and smaller. Sucks if you were counting on your dollars to live on.

      1. Inflation is the inevitable consequence of government issued currency. Small amounts are tolerable, possibly even beneficial (stable rates being something one can reasonably plan/manage.)

        Hyperinflation is bad, bad, bad.

  8. Why bother with Burney or the Cortex woman? The biggest socialist already in the WH.

  9. The budget proposal released Monday also puts to bed the question of whether Trump can keep his campaign promise to eliminate the national debt in eight years.

    For whom was that still a question? For whom was that ever a question?

  10. I got some bad news for you Eric. That piece of paper from the White House has nothing at all to do with debt OR deficits.

    That inconvenient constitution places all spending fully and exclusively on the House of Representatives. That they try to punt to the executive is a complete sham and smokescreen.

    It is on the democrat controlled house of representatives to originate ALL spending bills. So if you have a problem with the USA finances, give Nancy a call.

    1. Something tells me that, for all their erudite bitching about the tax cuts and sequestration, the Democrats will pass a spending bill that is even larger than last years. If they pass one at all (Nancy couldn’t seem to find the time to do it the last time she was speaker).

      Of course Tony and the fucking retards that think like him will still blame it on “tax cuts for the wealthy”.

    2. that’s not what they said when Obama was prez

  11. This is just further stealing from future generations and it will continue until the house of cards finally collapses with hyper inflation. It’s been going longer than I expected and maybe I will die of old age before it hits the fan, but it’s going to be pretty spectacular.

  12. So sick of all of the Reason partisan hacks. How about if we actually advocate a real decrease in federal spending and stop yelling about all the morons, both sides, fucking it up. United we stand, divided we fall, plain and simple. Both parties agree on that, enough already.

    1. Queue the comments from both sides ‘it wasn’t us!’ We just want a better America! Blah!

  13. Most libertarian president ever.

    1. Which is true.
      Sadly, all the others were worse.

    2. Most god-like for sure.

      Like Wonder Woman but muy macho.

  14. Every single article on the president’s budget on every side of the aisle and with any opinion is useless, because the president does but set budgets, and the proposed budget is useless symbolic bullshit that is even more meaningless than the “national Senate popular vote”.

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  16. OBH added $9T in 8 years, no? So, $7.9 in 10 years is a move in the right direction isn’t it? Enjoying the show.

    1. Especially given inflation, so his 7.9 will be far less in real terms.

  17. Well, nobody ever said the man was perfect! Honestly, I think if he could get away with it he would cut a ton of stuff, but the RINO types in congress thwarted almost every half assed attempt at doing anything when they had both houses… Who really thought they would pass any MAJOR spending cuts? Not me. But I’d bet my ass they’re raising spending less than Hillary + both chambers would have done.

    1. If Rand Paul was president, he’d propose a budget with a surplus and would continue to veto unbalanced budgets until congress had enough votes to override his veto. Trump isn’t even trying. Just remove him from office so Rand can run in 2020. Trump is just another Bush when it comes to the budget.

      1. And you hit the nail on the head, UNTIL THEY OVERRIDE HIT VETO.

        So he’s not bothering. Congress is the problem.

        I like Rand just fine, but I don’t think he’d ever have a chance at being president. He doesn’t have the charisma that dumb people like to vote for. I’m resigned to the fact that we’re going to keep spending until the dollar collapses, or something else dramatic happens. Therefore, I mainly just want to make sure the USA does the other stuff we need to do to keep things humming, like not being turned into a 3rd world country via mass unskilled immigration. Trump is okay on a few other things, and I give him a partial pass on spending, so whatevs.

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  19. Spending money is saving money don’t you know. Both sides playing the words don’t mean what they mean game but in teh end we all get screwed by it

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  21. Ahh but the fake libertarians here (embarrassed Republicans) will continue to vote for them all the same and disregard this somehow by saying the Dems would somehow be worse.

    1. I voted for Gary, but in what way would we be better off with Hillary as president?

      1. She wouldn’t have cut taxes. This the deficit would be smaller.

        1. Thus

        2. And she would have increased spending even more… Which would be worse. We have a spending problem, NOT a taxing problem.

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  23. The real number please? Since we will definitely have at least one big recession during the next ten years, and throw in the penchant for Congress to overspend and buy votes, then add in a bit of inflation, then add in less tax revenues with a slowing economy and you get the more reasonable amount of $13.4 trillion. Don’t forget that more and more money will be needed for wars, pensions, Medicare and social programs. Then there about $3-4 trillion needed for infrastructure and then another trillion for illegal aliens and another few trillion to pay for all the free stuff the government will provide and another $5-7 trillion for the Fed to use to keep the financial sector (the top 20%) from caving in. And besides, every year they come up with some silly budget numbers and they always prove to be dead wrong. And you can throw it all out the window when AOC, “The Boss” moves into the DC Swamp as the head cheese rat.

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