![]() ![]() “As we all know and as you point out, the CBO is consistently projecting long-term deficits due to the tax cuts, despite the macroeconomic feedback,” she said. “CBO is certainly not projecting that the tax cuts will pay for themselves,” Aparna Mathur, a resident scholar in economic policy studies at the conservative American Enterprise Institute, told in an email. (See Table B-3.)īut, overall, the macroeconomic feedback from the law reduces the projected deficit by just $461 billion, or around 20 percent, according to CBO’s April forecast. The congressional budget analysts expect the tax law will boost average annual real GDP, or gross domestic product, by 0.7 percent over the 2018 to 2028 period, for example.Īnd without the “effects of the macroeconomic feedback,” as CBO describes the law’s economic effects, it would add more than $2.3 trillion to the deficit over the next 11 years, including a more than $1.8 trillion increase in the primary deficit and a $471 billion increase in debt-service costs. The CBO does estimate that the tax law will prompt some economic changes that reduce its impact on the deficit. Kudlow, “Face the Nation,” July 29: Even the CBO numbers– even the CBO numbers show now that the entire one-and-a-half-trillion-dollar tax cut is virtually paid for by higher revenues and better nominal GDP. However, while talking about the deficit on CBS’ “Face the Nation” on July 29, Larry Kudlow, director of the National Economic Council, said that, according to CBO figures, revenue increases and economic growth “virtually” cover the “entire” cost of the tax cuts. The economic changes due to the law reduce the projected deficit by about 20 percent, according to CBO’s analysis. The law would increase the primary deficit by $1.3 trillion and raise debt-service costs by roughly $600 billion, CBO said. In April, the CBO’s nonpartisan budget analysts projected that the Tax Cuts and Jobs Act, factoring in all economic effects, would still add nearly $1.9 trillion to the total deficit between 20. ![]() The chief economic adviser to President Donald Trump recently said Congressional Budget Office numbers show the “entire $1.5 trillion tax cut is virtually paid for by higher revenues and better nominal GDP.” That’s not what the numbers show, experts told us. ![]()
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