- Larry Kudlow, President Donald Trump’s top economic adviser, said that the federal deficit is “coming down rapidly.”
- However, the federal deficit is actually growing – rapidly.
- According to the Congressional Budget Office, the federal deficit was $US530 billion over the past eight months.
- This was $US97 billion larger than the same time period last year.
Larry Kudlow, President Donald Trump’s top economic adviser, made a false claim about the national deficit during an interview Friday.
During an appearance on Fox Business, Kudlow claimed that the national deficit – the shortfall of federal revenue – is decreasing, when it is in fact doing the opposite.
“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 and it’s coming down rapidly,” said Kudlow, a former CNBC host and Wall Street economist. “Growth solves a lot of problems.”
According to the Congressional Budget Office, the federal deficit for the 2018 fiscal year – which runs October to September – was $US530 billion through the month of May. That is $US97 billion higher than the same time period in fiscal year 2017.
The CBO has estimated that the budget deficit will continue to grow over the next few years. By 2020, the CBO estimated that the budget shortfall will hit $US1 trillion a year.
“Federal budget deficits are set to increase rapidly this year and over the next four years, the Congressional Budget Office projects, then remain largely stable relative to the size of the economy – but at a very high level by historical standards – over the rest of the projection period,” the CBO said in its April outlook. “Those deficits would result in rising federal debt.”
The major driver of this sudden increase in the deficit is two bills Trump signed over the past year: the GOP tax law and the two-year bipartisan budget agreement. According to the Committee for a Responsible Budget, the two bills will account for $US420 billion of the projected $US981 billion deficit in 2019.
The CBO also said that much of the increase is due to the GOP tax law.
“The deficit that CBO now estimates for 2018 is $US242 billion larger than the one that it projected for that year in June 2017,” CBO said. “Accounting for most of that difference is a $US194 billion reduction in projected revenues, mainly because the 2017 tax act is expected to reduce collections of individual and corporate income taxes.”
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