President Trump’s top economic advisor Larry Kudlow on Friday falsely claimed the federal deficit is “coming down rapidly,” even though the latest data shows the deficit has expanded by $97 billion since the tax-cut law went into effect year.
“As the economy gears up, more people working, better jobs and careers, those revenues come rolling in and the deficit, which was one of the other criticisms, is coming down,” Kudlow said in an interview with Fox Business. “And it’s coming down rapidly. Growth solves a lot of problems.”
The non-partisan Congressional Budget Office released a report earlier this month that said the federal deficit had expanded by $97 billion this year compared to last year. The CBO report also found that government spending surged 6 percent relative to last year, while revenues only increased 3 percent.
In a report released earlier this week on the 30-year budgetary outlook, the CBO projected that the national debt was projected to double by 2048, far surpassing the highest historical debt burden in U.S. history.
“At 78 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II,” the report said.
The Trump administration has repeatedly argued that the GOP tax-cut law will spur an increase in spending by businesses and consumers and create jobs, leading to significant economic growth that will reduce the deficit.
“A lot of our critics said you can’t beat 2 percent. We’re now beating 3 percent,” Kudlow said Friday.
The CBO does expect growth to pick up this year and peak in 2022, before returning to a lower rate.
“CBO anticipates that recent changes to the tax code, changes in discretionary spending, and continuing increases in aggregate demand will spur a pickup in the growth of real GDP over the next few years,” the 30-year projection said.
“Thereafter, growth in real GDP is projected to make a transition to a pace that reflects the increases in the supply of labor, capital services, and productivity,” the report said, indicating that the fiscal push would not change long-term fundamentals about the economy.