President Trump in his first full budget says he will produce a surplus in a decade, though his fiscal pathway relies on projections of growth more optimistic than government and private-sector economists expect and deep cuts in anti-poverty programs such as Medicaid.

The budget to be released Tuesday will show that the annual federal deficit, which was $585 billion in the fiscal year that ended Sept. 30, will steadily decline until fiscal year 2027, when the nation will have a $16-billion surplus — the first since the start of the George W. Bush administration, though small in the context of what by then would be a nearly $6-trillion budget.

Nonpartisan budget watchers and even many Republicans are sure to be skeptical. Trump promises to reach balance and even produce a small surplus while he is calling for the deepest tax cuts in history, hefty increases in military and homeland security spending, and no reductions in Medicare and Social Security, the entitlement programs that are a main driver of projected federal debt because of the aging population.

According to budget documents made available to the Los Angeles Times, Trump would balance the budget in two ways. He projects economic growth averaging 3% starting in 2019. That’s at least a full percentage point more than government and private forecasters.

A growing body of evidence suggests the Medicaid expansion has improved public health. But conservative Republicans have been trying for decades to cut back the program, arguing it is ineffective and too expensive.

Trump, however, had promised not to cut such programs.

In May 2015, just before he entered the fight for the Republican nomination, Trump wrote on Twitter that he “was the first & only potential GOP candidate to state there will be no cuts to Social Security, Medicare and Medicaid.”

Healthcare cuts in the budget would reduce funding in many states that voted decisively for Trump — such as Ohio and West Virginia — including for opioid addiction treatment.

The budget “betrays millions of struggling Americans who voted for the president,” said Robert Greenstein, head of the liberal Center on Budget and Policy Priorities, adding that Trump’s proposals would “make inequality and poverty significantly worse, while allowing deficits, when honestly measured, to soar.”

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for fiscal restraint, criticized Trump for failing to propose the difficult, major structural changes needed to financially fix the major entitlement programs other than Medicaid — Social Security and Medicare — and constrain the projected growth of federal debt in the long term.

As baby boomers reach retirement age, the U.S. population is getting older and living longer, MacGuineas said, which means that to bring Social Security costs under control, steps such as gradually raising the eligibility age, slowing benefits for people with more wealth or raising the payroll tax cap, need to be on the table.

The United States has had such high rates of economic growth only during a demographic shift, such as the decades when baby boomers were entering the workforce and in their prime working years, MacGuineas said.

“These gauzy economic predictions will end up resulting in enormous piles of debt,” she said.

Twitter: @ByBrianBennett

brian.bennett@latimes.com

Go to Source

Trump’s budget hinges on higher-than-forecast growth and breaks his promise not to touch Medicaid