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CBO predicts economic growth, along with spending and deficit growth

On Monday, the Congressional Budget Office published its analysis of the budget and economic outlook for 2018-2028, giving both Republicans and Democrats some more ammunition to take into the midterm elections.

For Republicans, the analysis indicates that their recent tax cuts are helping to grow the economy as they said it would.

“In our economic projections, which underlie our budget projections, inflation-adjusted GDP, or real GDP, expands by 3.3 percent this year and by 2.4 percent in 2019,” CBO Director Keith Hall said in his statement on the office’s findings.

For Democrats, the analysis shows that the tax cuts are damaging.

“Projected deficits over the 2018–2027 period have increased markedly since we issued our last budget and economic projections in June 2017,” Hall also said in the same statement. “The increase stems primarily from tax and spending legislation enacted since then—especially the 2017 tax act, the Bipartisan Budget Act of 2018, and the Consolidated Appropriations Act, 2018 (emphasis mine).

For those interested in assigning bipartisan blame, CBO’s analysis offers an indictment of both parties.

“Between 2018 and 2028, real actual output and real potential output alike are projected to expand at an average annual rate of 1.9 percent,” Hall said.

By mentioning the Bipartisan Budget Act and the Consolidated Appropriations Act, Director Hall demonstrates that rising spending is resulting from bipartisan legislation. Both of those bills were passed with Republican and Democrat support.

Whatever parts of the analysis may be found problematic in particular, the CBO has reinforced the argument made by conservatives all around that tax cuts must be coupled with spending cuts, or else the country’s fiscal crisis will continue.

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