President Trump has, for now, given up on balancing the federal budget in the next ten years – and Congress is to blame, his budget director said Monday, according to the Wall Street Journal. Office of Management and Budget Director Mick Mulvaney told reporters that legislators "didn't make any of the large structural changes" he said last year were needed if the administration were to have a chance of reining in the federal deficit. At his confirmation hearing in January 2017, Mulvaney called for "fundamental changes" in the way "Washington spends and taxes." Instead of following his advice, Mulvaney said Monday, Congress "pounded the hell out of me." Unlike last year's budget plan, the fiscal 2019 blueprint unveiled by the Trump administration on Monday does not seek to balance the budget over the next decade.
The government of Prime Minister Shinzo Abe will postpone its goal of turning the primary budget balance into a surplus in fiscal 2020, as it aims to use more funds for spending than repaying debts, sources said Wednesday. Abe is expected to announce Monday plans to dissolve the House of Representatives for a snap election and to divert part of additional revenue from the planned consumption tax increase to finance child-rearing support and free education programs, to attract votes, the sources said. A primary budget surplus means the government can finance its spending on policy measures, except for debt-servicing costs, without new debt issuance. According to an estimate by the Cabinet Office, the government is expected to suffer a primary budget deficit of ¥8.2 trillion in fiscal 2020 even if it carries out the planned consumption tax hike from 8 percent to 10 percent in October 2019 and the Japanese economy grows at over 3 percent annually. Dropping the fiscal 2020 budget surplus target, which is an international pledge, clearly indicates the "Abenomics" economic policy seeking both growth and fiscal consolidation has reached a stalemate, critics pointed out.
The Democrat focused his ire on the House of Representatives, saying the chamber "failed" by not passing his stop-gap plan, which would have given lawmakers more time to come up with a final, two-year budget agreement that will cover a projected $5 billion deficit. Instead, House Democrats, who hold a narrow seven-vote majority, released an 11th hour, $40 billion two-year proposal they said could become the basis for a final, bipartisan budget agreement that could be ready for a vote July 18.
The Congressional Budget Office is projecting that this year's deficit will hit $897 billion, up 15.1 percent from the $779 billion deficit recorded last year. In the CBO's projections for the next decade, it forecasts that the deficit will once again top $1 trillion annually beginning in 2022 and will never fall below $1 trillion over the rest of the forecast period.