The CBO estimates the federal debt in 2028 will be equivalent to 86 percent of GDP under President Trump’s budget — significantly lower than the CBO’s baseline of 96 percent. The agency also estimates the president’s budget will reduce the federal deficit by $2.9 trillion from 2019 to 2028 compared to the CBO baseline. The cumulative deficit from 2019 to 2028 is expected to reach $9.5 trillion. However, under President Trump’s 2019 budget, the deficit as a percentage of GDP would peak at 4.5 percent in 2019 and decline to ultimately average 3.7 percent over the next decade, according to the analysis.
These savings come largely from a $2.1 trillion reduction in nondefense discretionary spending and a $1.3 trillion reduction in mandatory healthcare spending, according to the CBO. The healthcare spending reductions are almost entirely from modifications to the ACA. Those modifications include:
- Repealing subsidies for health insurance bought on ACA exchanges
- Repealing Medicaid expansion
- Capping Medicaid spending by enrollee
- Allotting $120 billion for state block grants in 2020
Additional changes that will affect healthcare spending include capping damages for medical liability lawsuits, a proposal to increase out-of-pocket costs for some drugs under Medicare Part D, and a proposal to reduce Medicare payments for some providers.
Baseline projections are calculated using economic projections and budget estimates from the CBO and JCT. Read more here.
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