BY JULIA OFFUTT
It is not uncommon for budget proposals from the White House to be colored by political motivations, but the most recent budget proposal from President Donald Trump for the 2019 fiscal year is pretty remarkable, even by this standard. The president’s proposal assumes an average growth of 3.1 percent over the next three years. This represents a severe departure from nearly every other major economic forecast, including those from the Federal and Congressional Budget Office. For reference, 2017 saw an increase of 2.6 percent and was generally regarded as a successful fiscal year. To be clear, this is to say that Trump expects around 0.5 percent more growth than was experienced last year, every year for the next three years.
Of course, Trump is no stranger to hyperbolic statements, regardless of the topic. However, a major issue emerges when these projections – which are arguably the product of political maneuverings under the guise of wildly optimistic expectations – are then used to justify budget cuts to programs and services that have very tangible impacts on people’s lives. For example, the 2019 budget proposal allocates 3 percent of GDP to Medicare – the same percentage as was allotted to the program in 2009. This is the case in spite of the fact that the number of Medicare recipients has increased by 33 percent over the last decade. Perhaps this can be justified by the projections in the budget proposal; these new beneficiaries will hypothetically be covered by the expected 3 percent of annual economic growth. What needs to be understood, though, is that these are far-fetched predictions at best. At worst, they are delusions, entirely illogical forecasts with no substantial evidence to support them.
Now, it is true that the U.S. has been enjoying a fairly strong economy recently and it is quite possible that this trend could continue. What does not seem possible, or at least seems deeply improbable, is that the economy will grow at the rate that Trump’s proposal projects. The fact is that the nation’s labor force is diminishing because of its aging population. Baby Boomers -the president’s generation – are retiring. Unless a large influx of immigrants comes in to fill the vacancy left by them, the labor force will continue to shrink for the next 15 years, and considering the stagnating immigrant population resulting from Trump’s policies, it is highly unlikely that this trend will reverse any time soon, at least under the current administration.
At this point in his presidential stint, inappropriate comments and wild assertions made by Trump barely make headlines anymore. It is troubling though that economic projections with so little apparent basis in reality could have very real effects on issues such as government-funded benefits and/or the insurance that provides them. Trump has already won the campaign, but it doesn’t look like he’s quite done blowing smoke. He seems to have replaced his fervor for polling points with higher approval ratings which would account for some of the claims he’s made, like that former President Obama’s economic policies put millions of Americans out of work when the unemployment rate was 4.7 – less than the median of 5.6 percent since 1948 – when he took office.
From this perspective, it is all too easy to forget that individual presidents generally have pretty minimal influence on the economy. The projections in Trump’s 2019 budget proposal are unfounded, and the long term economic effects of this blustering are unlikely to be substantial. Still, the proposed budget cuts to programs like Medicare and SNAP (a food stamp program) still represent a potential loss of necessary government aid for a lot of people. If the projections do turn out to be inaccurate, which, as has been established, seems highly probable, then many citizens might suffer without the assistance they require, at least in the short term. This is largely why these projections have been a source of concern for many economists and others who understand the tangible implications that they have on the funding of government programs.