Adviser Peter Navarro said Wednesday on Newsmax that the administration's proposed tax plan — dubbed the "big, beautiful bill" — will generate a $2 trillion surplus over the next decade, challenging deficit projections from the Congressional Budget Office and downplaying concerns over rising federal spending.
Navarro, senior counselor to President Donald Trump on trade and manufacturing, said the administration's proposed budget package would result in a multitrillion-dollar surplus despite warnings from economists and lawmakers about growing federal deficits.
Appearing on "Rob Schmitt Tonight," Navarro strongly criticized the Congressional Budget Office's analysis of the bill and said its modeling fails to reflect realistic economic growth or tariff revenues.
"When the Congressional Budget Office scored this, it came out with an estimate that said we were going to have a deficit, a new debt of $3.8 trillion over a 10-year period," Navarro said. "But if you do the math correctly on two things — what the assumed growth rate should be and counting the tariff revenues — it's a $5 trillion swing, and we wind up with a $2.2 trillion surplus."
Navarro blamed the CBO's "static, Keynesian" economic models for painting a misleading fiscal picture. He argued that the office underestimated growth during Trump's first term and is doing so again. "They assumed an anemic 1.7% rate when we should easily be able to do at least a point better than that. That's about $2.5 trillion in additional revenue," he said. "And then they don't even score the tariffs. If you just do the 10% baseline tariff, that's another $2 trillion plus."
Navarro said financial markets, including long-term bondholders and even Elon Musk, are underestimating the budgetary benefits of the administration's tax and trade policies. "The point here is Elon [Musk] should be happy with what we're doing. The bond market should be happy. The American people should be ecstatic," he said.
Addressing concerns from Republican senators such as Ron Johnson, Rick Scott, and Rand Paul, Navarro said fears of overspending are misplaced. "If they're freaking out because there's supposed to be this $3.8 trillion increase to the debt, they shouldn't freak out because it's going to be a $2 trillion surplus," he said. "We are doing everything possible to cut without hurting anything related to the American people."
Navarro added that the administration is focused on using the projected surplus to reduce debt or fund additional tax cuts. "The key here is to get the debt service down," he said. "The bigger that debt is, the more interest we have to pay and the more that erodes the other kinds of things we could do with government or give tax cuts."
Pressed on whether spending levels would remain high, Navarro acknowledged the size of the federal budget but maintained that the net fiscal impact would be positive. "We're going to gain by $2 trillion, and that $2 trillion we're going to be able to either use for tax cuts for the American people or retire debt," he said.
Navarro concluded: "The big, beautiful tax bill will generate on net $2 trillion or more in a surplus rather than create a deficit."
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Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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