Presidential budgets are often known as wish lists.
To put it more politely, they are statements of priorities.
Or to put it less politely, dead on arrival.
President Donald Trump’s fiscal plan may be all those things, but with something extra that drew particular comment from budget wonks: A fat helping of magical assumptions.
As a wish list for a Republican White House, it carries few surprises. Trump seeks big tax cuts, sharp hikes in military spending and spending cuts that are expected to slash Medicaid and drive millions of people off food stamps.
But it is his underlying economic predictions that politically mainstream fiscal experts seem to find, well, otherworldly.
Larry Summers, a well-known economist and Treasury Department official under President Barack Obama, went beyond calling the numbers “wildly optimistic.”
“There appears to be a logical error of the kind that would justify failing a student in an introductory economics course,” Summers says in a commentary in The Financial Times.
Summers, among others, says the anomaly comes not only from exaggerating projected growth due to the proposed tax program and reduction of regulations, but opaque counting.
Critics say the assumption from Trump & Co. seems to be that not only will tax revenue reductions pay for themselves, they will cover spending increases not offset by cuts — perhaps on the order of $2 trillion over 10 years.
That means annual economic growth of 3 percent, higher than the post-recession average of 2 percent.
“I see no way that’s going to remotely happen,” one-time Reagan administration budget director David Stockman was quoted as saying. “It assumes you’re going to go 206 months without a recession, which has never happened.”
Gregory Mankiw, an economic adviser to former President George W. Bush, stated in an Op-Ed piece: “A reasonable rule of thumb, in my judgment, is that about one-third of the cost of tax cuts is recouped via faster economic growth.”
A number of spending cuts Trump proposes also are quite far from a sure bet. Politically, the budget exercise about to proceed in Washington, D.C., will give majority Republicans in both houses a chance to display independence.
For one: Rep. Tom Cole (R-Okla.), chairman of the appropriations subcommittee overseeing the National Institutes of Health budget, said of a proposed cut to the agency: “I don’t think it’s a wise choice.”
Even military advocates sound unhappy with the level of defense increase Trump asks. Rep. Mac Thornberry (R-Texas), House Armed Services Committee chairman, said Trump’s defense proposal was “basically the Obama approach, with a bit more, but not much.”