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WSJ: Trump Teams Growth Forecasts Far Rosier Than Those of CBO, Private Economists
WASHINGTON—The Trump administration has drafted preliminary economic growth forecasts in its federal budget planning that rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters, according to several people familiar with the discussions.
The forecasts are being revised, these people said, following an internal debate. One concern is that pressing staff economists to produce aggressive forecasts might undercut the credibility of top appointees forced to later defend those numbers.
The deliberations show the challenge the administration faces as it tries to reconcile the competing goals of cutting taxes, boosting military and infrastructure spending, preserving Medicare and Social Security programs and keeping budget deficits from soaring.
. . .
The internal Trump projections are at odds with other assessments of the economy’s long-run growth prospects. The Congressional Budget Office, a nonpartisan agency that provides analysis to Congress, estimates the economy will grow 1.9% annually between 2021 and 2027. The Federal Reserve forecasts growth of 1.8% over the long run. While there are often disparities between the White House and other agencies on growth projections, they are rarely this large.
The forecasts are being revised, these people said, following an internal debate. One concern is that pressing staff economists to produce aggressive forecasts might undercut the credibility of top appointees forced to later defend those numbers.
The deliberations show the challenge the administration faces as it tries to reconcile the competing goals of cutting taxes, boosting military and infrastructure spending, preserving Medicare and Social Security programs and keeping budget deficits from soaring.
. . .
The internal Trump projections are at odds with other assessments of the economy’s long-run growth prospects. The Congressional Budget Office, a nonpartisan agency that provides analysis to Congress, estimates the economy will grow 1.9% annually between 2021 and 2027. The Federal Reserve forecasts growth of 1.8% over the long run. While there are often disparities between the White House and other agencies on growth projections, they are rarely this large.
https://www.wsj.com/articles/trump-teams-growth-forecasts-far-rosier-than-those-of-cbo-private-economists-1487356278
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