Breaking precedent, White House won’t release formal economic projections this summer that would forecast extent of downturn
White House officials have decided not to release updated economic projections this summer, opting against publishing forecasts that would almost certainly codify an administration assessment that the coronavirus pandemic has led to a severe economic downturn, according to three people with knowledge of the decision.
The White House is supposed to unveil a federal budget proposal every February and then typically provides a “mid-session review” in July or August with updated projections on economic trends such as unemployment, inflation and economic growth.
Budget experts said they were not aware of any previous White House opting against providing forecasts in this “mid-session review” document in any other year since at least the 1970s.
Two White House officials confirmed the decision had been made not to include the economic projections as part of the mid-session release. The officials, who spoke on the condition of anonymity to discuss internal deliberations, said that the novel coronavirus is causing extreme volatility in the U.S. economy, making it difficult to model economic trends.
The document would be slated for publication just a few months before the November elections.
“It gets them off the hook for having to say what the economic outlook looks like,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who served as an economic adviser to the late senator John McCain (R-Ariz.).
Both liberal and conservative critics said the White House should publish its economic projections in line with the precedent set by prior administrations, regardless of the uncertainty caused by the pandemic. The White House under President Barack Obama continued to release these numbers during the Great Recession, although they were unflattering.
This year’s White House budget report is expected to include data on federal spending, along with information on enacted legislation, but not an annual federal deficit projection, the White House officials said. The officials said the White House will release the annual deficit for the year by the end of the fiscal year in October.
A senior administration official said in a statement that it would be “foolish” to publish forecasting data when it “may mislead the public.”
“Given the unprecedented state of play in the economy at the moment, the data is also extremely fluid and would produce a less instructive forecast,” said senior administration official, who spoke on condition of anonymity to describe the White House’s decision. “Furthermore, we remain in complete accordance with the law as there is no statutory requirement to release this information, just precedent, which, when compared to our current economic situation, is dismissible.”
The magnitude of the economic impact has grown by the week. The Treasury Department said earlier this month it plans to borrow $3 trillion from April through June to finance spending in response to the pandemic, while the monthly deficit in April soared to $738 billion.
On Thursday, the Labor Department reported that Americans filed another 2.1 million jobless claims last week, bringing the 10-week total to more than 40 million.
The budget review will include a brief summary of economic conditions to date. One official said White House staff are also busy with implementing the $2 trillion Cares Act aid package approved by Congress in March.
The economic projections are jointly produced by a “troika” consisting of the director of OMB, the chair of the White House Council of Economic Advisers, and the treasury secretary.
Since the release of the White House budget in January, the unemployment rate has skyrocketed from about 3.5 percent to close to 15 percent. President Trump has repeatedly expressed confidence in a rapid economic rebound from the virus, but mainstream economists and Wall Street forecasters have predicted unemployment could remain north of 10 percent through 2020 and into 2021.
Budget experts say there is no reason the White House would be unable to release its own economic projections. The Congressional Budget Office, for instance, updated its economic projections in both April and May as the coronavirus rippled through the U.S. economy.