White House says budget will balance in 15 years if economy averages 3 percent growth
FOX Business’ Charlie Gasparino discusses Vice President Mike Pence’s suggesting that a second round of Trump tax cuts are on their way.
President Trump’s $4.8 trillion fiscal 2021 budget plan runs a deficit of $1 trillion, but would lead to a balanced budget within 15 years under rosy economic conditions, a senior administration official told FOX Business.
The plan calls for $4.4 trillion in spending cuts over a decade, including mandatory spending cuts of $2 trillion and 5 percent discretionary spending cuts plus 2 percent annual cuts for each year after, the official said.
It includes $741 billion for defense and $2 billion in additional Department of Homeland Security border wall funding, but does not fund the Yucca Mountain nuclear waste site in Nevada.
The president’s budget proposal heads to Congress, which may use it while drafting its own budget resolutions.
Trump delivers his State of the Union address to a joint session of Congress last week. (Leah Millis/Pool via AP)
The projections take into account an extension of the 2017 Tax Cuts and Jobs Act (TCJA), a senior administration official told FOX Business. The administration says they are on track to bring in $3.9 trillion in additional revenue from TCJA, which is supposed to pay for itself in 10 more years.
Balancing the budget in 15 years hinges on a very healthy economy, including averaging 3% growth over the next 15 years.
Missing those numbers would throw off the administration’s models.
The White House expects 3.1 percent fourth-quarter 2020 growth and 3 percent 2021 growth.
When it comes to entitlements, the administration is expected to once again propose broadening the current work requirement. Such a change would mean that Americans 18 to 65 years old who put in at least 20 hours a week at a job, a job training program or a community service program can receive benefits.
For the past several administrations, able-bodied recipients of the Supplemental Nutrition Assistance Program (SNAP) have mostly had to work at least 80 hours a month — while recipients of traditional welfare known as Temporary Assistance for Needy Families (TANF) have also faced work requirements.
The administration will propose another change in the form of a “harvest box” benefit that provides shelf-stable foods.
The budget will mean $182 billion in reforms to SNAP and $70 billion in reforms to disability insurance, the official said. The administration will also ask that federal government employees contribute more to their retirement benefits.
The budget will also include $170 billion in student loan reforms that include debt forgiveness, the official said. The plan would consolidate all programs into one income-driven payment plan. After 15 years of paying a certain percentage of adjusted gross income, a college graduate’s debt would be forgiven, with that number bumping up to 30 years for graduate students.
The Trump administration pursued the Yucca Mountain nuclear repository for years but soured on it earlier this month.
The plan also seeks to double funding for artificial intelligence and related research from $973 million to nearly $2 billion.