The CBO’S reading on Donald Trump’s Tax Plan is one that GOP needs to use as a blueprint for future economic progress.
The Republican overhaul of America’s tax code and increased government spending are projected to boost economic growth to 3.3 percent this year but push the national debt to nearly the same size as gross domestic product by 2028, according to government data released Monday.
The Congressional Budget Office forecast that the new tax law will generate an average of 0.7 percent growth over the decade and create 1.1 million jobs. It also predicted the two-year federal spending deal would increase GDP by 0.3 percent this year and 0.6 percent in 2019. However, larger budget deficits would crowd out private investment in later years, dampening economic growth.
As a result, the CBO estimated the cumulative deficit over the next decade will be $1.6 trillion larger than previously projected. By 2028, the national debt would total 96 percent of GDP.
“Such high and rising debt would have serious negative consequences for the budget and for the nation,” the CBO report said.
Republicans have been fending off criticism from fiscal hawks for passing a $1.5 trillion tax cut late last year and following it up with a $1.3 trillion government spending deal with Democrats signed last month. The CBO estimates that annual deficits will reach $1 trillion in 2020, buttressing similar warnings from private forecasters.
“We now are facing trillion-dollar deficits as far as the eye can see — a terrible path, made even worse by the fact that this comes amidst a strong economy and is the self-inflicted result of irresponsible policy choices,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Hopefully it will serve as a wake-up call for our political leaders who have become frighteningly comfortable with deficit denial.”
This CBO reading is great for the Future of the Tax Plan. It shows that it will indeed allow for economic growth over the next few years. The debt is something the CBO uses to trash the Tax Cuts. The problem is that the debt is not an issue with Tax Cuts it is spending that is the issue. Republicans need to use this issue and tell the American people that the key to sustained long-term economic growth is Tax Cuts mixed with spending cuts. Although Trump has been very poor with spending, he is the first President in over 50 years to cut the Debt-GDP down 1% in his first term.