The President’s Fiscal Year 2018 Budget Proposal Overview

Overview, Baselines, Spending, Discretionary Caps, Revenue, Debt, & Economic Assumptions

WASHINGTON, DC – The Senate Budget Committee today released its first in a series of analyses of the President’s FY 2018 Budget submission. The May 23, 2017, Budget Bulletin is focused on an overview of the President’s fiscal year 2018 Budget Proposal. 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.

Excerpts follow:

Overview: A Path to Balance by 2027
President Donald Trump’s first budget request puts deficits on a downward trajectory and would result in a $16 billion surplus by 2027, according to White House Office of Management and Budget (OMB) estimates. The budget proposes spending $48.9 trillion over the 2018-2027 period and collecting $45.8 trillion over the same period. While this still results in cumulative deficits of nearly $3.2 trillion over the budget window, those deficits are $3.6 trillion less than the OMB Budget Baseline projects.

Under the President’s budget, total federal outlays over the forecasted period would fall from $53.5 trillion to $48.9 trillion, a reduction of $4.6 trillion from OMB Budget Baseline levels. The President’s budget would have total discretionary outlays of $11.7 trillion over the next 10 years, down $1.8 trillion from the projected $13.5 trillion. This $1.8 trillion figure captures both the reduction in nondefense discretionary spending and the $27 billion increase in defense discretionary outlays.

Under the President’s budget, total federal revenues over the entire forecasted period would fall from $46.7 trillion to $45.8 trillion, a reduction of $990 billion. As a percentage of GDP, revenues would rise from 18.1 percent in 2017 to 18.4 percent in 2027. Revenue growth inherent in the OMB Budget Baseline includes over $2.2 trillion due to economic feedback. Policy proposals include repealing and replacing Obamacare, a $1 trillion reduction in revenue; and the net effects on receipts from other proposals, a $10 billion increase in revenues.

According to OMB estimates, under the President’s budget, debt held by the public as a percentage of GDP would fall from 77 percent in 2016 to 59.8 percent in 2027 – the lowest since 2010 (60.9 percent).

Economic Assumptions
President Trump’s plan projects policy proposals will raise economic growth from 2.3 percent for 2017 to a long-term trend of 3 percent by 2020. This increased economic 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 CBO’s 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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