Among the more controversial elements of the budget will be the administration's growth forecasts. The White House projects the nation's economic growth rate will rise to 3% by 2021, compared with the 1.9% forecast under current policy by the Congressional Budget Office.
"I am extremely pessimistic that you can show a balanced budget unless you're going to make the mother of all 'rosy scenario' type assumptions," said William Hoagland, a former congressional Republican budget aide who is now at the Bipartisan Policy Center in Washington.
While the Trump forecast will show a large increase in the country's growth rate, it won't show nearly as much of an increase in government borrowing costs. The White House budget official said the forecast will show yields on benchmark 10-year Treasury notes rising to 3.8% by 2020, which is only slightly higher than the CBO, which estimates rates rising to 3.6% over the next decade.
- By Nick Timiraos, The Wall Street Journal. May 19, 2017.
I wonder whether the Congress is going buy Trump's rosy assumptions of growth. His idea of the 3% growth rate comes from the Reagan years; never mind a completely different demographic, fiscal and international trade environment. Trump himself is no Reagan either.