Trump's Budget Proposal Is Based On Some Pretty Optimistic Assumptions

The Trump budget expects the U.S. economy to reach 3 percent by 2021. But economists say that number isn't realistic.
Posted at 3:38 PM, May 23, 2017

President Donald Trump released his proposed budget Tuesday.

And it didn't take long for critics to point out that it's based on pretty optimistic assumptions.

The Trump budget anticipates 3 percent economic growth by 2021, producing about $2 trillion in additional revenue.

The director of the Office of Management and Budget told reporters that kind of growth is achievable.

But economists say that number just isn't realistic, even under the best circumstances.

"They are very optimistic. They're talking about 3 percent growth for the long-run future, and we haven't seen 3 percent growth for a long time," said Alice Rivlin, former vice chair of the Federal Reserve and founding director of the Congressional Budget Office.

Three out of the last four U.S. presidents averaged annual GDP growth around 2 percent or less.

And data from the Federal Reserve predicts a long-term annual growth of just 1.8 percent.

Congress is expected to draft its own budget soon. And experts say they won't be surprised if lawmakers set aside Trump's proposal during that process.