President’s FY 18 Budget: Economic Growth Policies
WASHINGTON, DC – The Senate Budget Committee today released the third in a series of analyses of the President’s FY 2018 Budget submission. The June 7, 2017, Budget Bulletin is focused on Economic Growth Policies as part of the President’s fiscal year 2018 Budget request. The Budget Bulletin provides regular expert articles by Senate Budget Committee analysts on the issues before Congress relating to the budget, deficits, debt, and the economy.
Read the full Senate Budget Bulletin here.
President Donald Trump’s 2018 budget proposal aims to restore economic growth, balance the budget within 10 years, and fund new priorities. Driving the Trump administration’s economic strategy is a desire to jumpstart the underperforming U.S. economy emerging from the 2007-2009 recession; in contrast with the generally robust growth rates following previous postwar recessions, average annual economic growth has not risen above 3 percent.
President Trump’s budget outlines key indicators of economic performance and assumptions and links them with the administration’s budget policy proposals to help restore economic growth, create jobs, and reduce government overspending.
State of the Economy
Since 2010, real growth in gross domestic product (GDP) has averaged 2.1 percent (fourth-quarter-on-fourth-quarter). In the first quarter of 2017, the U.S. economy expanded by an annual rate of only 1.2 percent, subject to revision. Historical annual growth rates have averaged 2.9 percent over the past 50 years and 3.2 percent in the postwar era.
Budget Economic Assumptions
President Trump’s plan projects that policy proposals will raise economic growth from 2.3 percent for 2017 to a long-term trend of 3 percent by 2020. This increased growth decreases projected deficits by nearly $2.1 trillion over the 10-year window. The administration’s post-policy growth projections average a percentage point higher than the Congressional Budget Office’s (CBO) current-law growth projections. The private sector consensus forecast, as calculated by Blue Chip Economic Indicators, averages in between these estimates.
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