Trump's top economic adviser says the deficit is "coming down," but the government disagrees
Larry Kudlow, the president's top economic adviser, claimed on the Fox Business Network on Friday that the federal deficit is "coming down rapidly," as a result of President Trump's pro-growth policies. But the Treasury Department, Congressional Budget Office, and outside think tanks disagree with him.
"As the economy gears up, more people working, better jobs and careers, those revenues revenues come rolling in, and the deficit, which is one of the other criticisms, is coming down, and it's coming down rapidly," Kudlow told Fox Business' Maria Bartiromo, who did not appear to challenge him on that statement. "Growth solves a lot of problems."
Kudlow did not say how he believes the deficit — essentially the amount the government spends that is more than what it takes in as revenue — is going down, when the Treasury Department and Congressional Budget Office say otherwise. (The deficit is not to be confused with the national debt, which is the accumulation of deficits, year over year.)
The federal deficit in fiscal year 2017 was $666 billion, according to the Treasury Department. It is projected to be $804 billion in 2018 and $981 billion in 2019, according to the Congressional Budget Office's (CBO) figures in April.
The CBO issued a grim report Tuesday on the country's fiscal future, finding the GOP tax law is expected to add $1.84 trillion to the deficit over the next decade. Economists, as well as the CBO, blame a combination of increased spending and the tax law changes that are resulting in lower revenues, on top of already-rising spending on programs like Social Security and Medicare.
The Treasury Department also disagrees with Kudlow's assessment that the deficit is headed in the right direction.
In May, the Treasury Department posted a $147 billion budget deficit, which is 66 percent higher than the deficit posted in the month of May 2017.
The Committee for a Responsible Federal Budget released a statement later Friday claiming Kudlow's claim was untrue.
"We rate this claim as false," the CRFB wrote. "Not only are deficits not falling rapidly – they aren't falling at all."
"Kudlow is correct that a growing economy can produce more revenue, which would help reduce the deficit," CFRB added. "However, unpaid-for legislation, such as the 2017 tax law and 2018 spending deal, only widens budget deficits, negating the effect of a growing economy."
The nation's overall debt-to-GDP ratio is at the highest level since after World War II, and is expected to be nearly 100 percent by 2028, the CBO says.
That's despite Mr. Trump's claim to the Washington Post last spring that he would eliminate the national debt "over a period of eight years." The national debt, which was $19.9 trillion when Mr. Trump took office, surpassed $21 trillion in March.