The budget also assumes in its baseline the extension of the individual income tax provisions in the Tax Cuts and Jobs Act (TCJA) beyond their December 2025 expiration. Significant further savings are generated from changes to health care, welfare programs, and reductions and reforms to other parts of the budget. The largest spending cut in the budget comes from $1.55 trillion in cuts to non-defense discretionary programs, generated by reducing nominal spending 5 percent between 20 and an additional 2 percent each year thereafter. The Budget Includes Significant Revenue and Spending Proposalsīy its own estimates, the budget proposes $585 billion of new initiatives and $5.2 trillion of budgetary savings, for net savings of $4.6 trillion. Under CBO's baseline, debt would rise to 98 percent of GDP by 2030. With these savings, debt would increase slightly from 80 percent of Gross Domestic Product (GDP) today to 81 percent by 2022 and then fall to 66 percent of GDP by 2030. By comparison, debt would hold steady around 80 percent of GDP and be on a slightly declining path under the Office of Management and Budget's (OMB) baseline (which bases its estimates on overly optimistic forecasts of economic growth). The President's budget claims $4.6 trillion in net deficit reduction over the next decade relative to its own baseline, the result of $585 billion in new tax cuts and spending increases and $5.2 trillion in gross deficit reduction, based on their figures. The Budget Claims Substantial Deficit Reduction Stay tuned to the Committee for a Responsible Federal Budget and The Bottom Line throughout the day and the rest of the week as we dive deeper into all aspects of the budget. This blog provides a brief overview of the budget and its contents. Later today, we will be publishing our full analysis of the President’s budget. Moments ago, President Trump released his Fiscal Year (FY) 2021 budget proposal, outlining his tax and spending proposals and their effects on the federal budget for the next decade.
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