President Donald Trump’s fiscal year 2018 budget request is light on tax details, giving House Republicans some leeway to continue crafting a plan, reports Bloomberg.
The proposal, released May 23, assumes that tax reform will occur without adding to the deficit, but it doesn’t provide details on how the tax code itself will change or how the proposed cuts will be paid for. The proposal serves as a marker for the administration’s priorities, but is likely to be starkly different from the funding levels congressional appropriators will set later—a discrepancy common with all presidential budget requests.
Tax cuts will bring in more than $2 trillion in revenue over the next decade, according to the proposal—an assumption that means the budget will be balanced in that time. The plan proposes a $43 billion boost in defense spending while making large cuts to federal agencies—in line with a blueprint the administration released March 16.
The Trump administration has also projected 3 percent economic growth, a target that many economists say isn’t feasible. The plan would need more base broadeners “to justify the revenue levels that they are relying on,” Kyle Pomerleau, director of federal projects at the conservative-leaning Tax Foundation, said in an email.
Treasury Secretary Steven Mnuchin defended the projection in a statement on the department’s website, saying “these initiatives, coupled with comprehensive tax reform and other key priorities, will move America one step closer to sustained economic growth of three percent or higher.”
Though the Trump proposal doesn’t delve into the nitty gritty, “there are a lot of things everyone agrees to,” like the need to cut taxes, simplify the tax code and make the U.S. economy more competitive. Those principles can guide Congress going forward, Rep. James B. Renacci (R-Ohio), a member of the House Ways and Means Committee, told Bloomberg BNA.
“These are the things that I think would join us all. Now the question is how do we get to a solution,” he said.
The Trump administration is expected to release a more detailed tax reform proposal next month, after putting out a bulleted list of top goals on April 26. The House Ways and Means Committee continues to work toward crafting legislative language and finding common ground with the White House and the Senate on controversial elements. House leadership, and many members, have vowed to make tax reform revenue neutral so that the plan can be permanent.
The Committee for a Responsible Federal Budget said in a May 23 paper that the administration’s projection of a balanced budget is “based on unrealistic growth assumptions.” If based on “realistic” assumptions from the Congressional Budget Office, debt would remain roughly the same as current levels by 2027, the CRFB said.
“There’s not clear agreement on tax reform and there’s certainly not clear agreement on the president’s so-called budget,” Rep. Bill Pascrell Jr. (D-N.J.) told Bloomberg BNA May 23. “He hasn’t given us much detail on anything.”