CRFB Statement on President’s FY 2027 Budget

President Trump released his Fiscal Year (FY) 2027 budget request today. The President’s budget is intended to outline the Administration’s priorities, including discretionary spending, mandatory spending and revenue proposals; however, this budget focuses only on the discretionary spending request and supplemental requests for mandatory funding to be enacted through the reconciliation process.  

The budget proposes to increase total defense funding to $1.5 trillion in FY 2027 – including $350 billion of funding in a new reconciliation bill and a $251 billion increase in base defense discretionary spending – partially offset by a purported $73 billion (10%) reduction in base nondefense discretionary spending.

The budget includes no official topline budgetary figures, but using its supplemental documents, we estimate that the budget reports to reduce debt to about 94% of Gross Domestic Product (GDP) by 2036 – compared to 120% of GDP in the Congressional Budget Office’s most recent baseline – largely by assuming 3% average annual real GDP growth over the decade.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

We are 14 months into the President’s second term, and President Trump still hasn’t put forward a full budget outlining his priorities. This budget is not only two months late, but it is also light on details and heavy on borrowing. It is missing any significant plan for how to address the major drivers of our spending and deficit growth, it leaves Social Security on a track to be insolvent within the decade, and it relies on an entire decade of rosy economic assumptions for the vast majority of its improvements in the nation’s finances. In fact, it includes no summary figures of deficits or debt under the President’s budget. It is an astonishing lack of information.

With deficits larger than 6% of GDP and debt around the size of the economy, the President doesn’t propose any plan for putting our budget on a sustainable path. Instead, he calls for a large expansion of the defense budget – increasing defense funding by more than $3.2 trillion over the next decade. While some of this is paid for with nondefense discretionary reductions – which we estimate would reduce base nondefense funding by $2.5 trillion over a decade – there is no explanation for the remainder. Instead, the budget assumes a fantastical 3% annual growth over the next decade without any information to back it up.

The budget should have a plan to reduce deficits to 3% of GDP or lower using realistic assumptions and rejecting all gimmicks. Instead, it doesn’t even report its deficit figures and is silent on our growing national debt.

As the budget process formally kicks off for the upcoming fiscal year – and as some lawmakers consider using the budget reconciliation process again – we need a serious, sobering assessment of our unsustainable fiscal situation.  

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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.