Economists think policymakers should focus on deficit reduction

A survey of economists from the National Association of Business Economics found 46% think reducing the national deficit and debt should be the top policy priority.

That was an uptick from the 43% of respondents who said the same in NABE’s August survey. February’s survey summarized responses from 152 NABE members, 61% of whom also said current fiscal policy is “too stimulative,” marking “the largest share of respondents holding that opinion since the summer of 2018,” the survey’s authors noted.

The business economists surveyed ranked deficit reduction as the Trump administration’s top priority above immigration and healthcare reform, Gregory Daco, EY-Parthenon chief economist and NABE president, said in a statement tied to the survey. The economists favor “a mix of structural measures to boost growth, spending restraint or entitlement reform, and higher taxes to address the fiscal gap,” Daco added.

To address the fiscal deficit, respondents cited a number of preferred solutions: 62% called for “enacting structural policies to stimulate stronger economic growth,” 55% wanted to see “spending restraint or cuts to federal entitlements,” 49% favored “increasing tax revenues by raising existing tax rates,” and 47% “recommend[ed] cuts to non-defense discretionary federal programs.”

Notably, the survey was conducted between January 29 and February 9, before the Supreme Court’s tariff ruling. The Trump administration’s tariffs, now imperiled, have become a crucial revenue source for the federal budget.

While Trump administration officials like Treasury Secretary Scott Bessent have stressed that the court’s ruling won’t hurt tariff revenue, analysts have called into question the stability of tariffs as a revenue source.

“The honest answer is, the tariffs are a more regressive way to raise revenue than other options that are on the table; there’s good economic literature on the negative economic impacts of tariffs,” John Iselin, associate director of economic analysis at the Yale Budget Lab, told the New York Times. “But at the same time, we will need a lot of revenue over the next several decades.”