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Cramer: The robust growth projections in Trump's budget don't jibe with reality

  • Jim Cramer says President Trump's budget plan doesn't jibe with reality.
  • "Look, I'd love the growth. It would be fantastic," Cramer added.

President Donald Trump's robust economic growth projections in the new budget proposal don't jibe with reality, CNBC's Jim Cramer said Tuesday.

In its proposed fiscal 2018 budget, which became public Monday night, the Trump administration expects that the nation's economic growth rate will rise to 3 percent, higher than the 1.9 percent growth forecast by the Congressional Budget Office.

"Look, I'd love the growth. It would be fantastic," Cramer said on "Squawk on the Street." "This is a business administration, and I think that if you were to do an analysis of a company, and you predicted this kind of growth, you know it would cost a lot to get this kind of growth."

In a blog post published Tuesday in The Washington Post, Larry Summers, former Treasury secretary in the Clinton administration, said the growth forecast based on the Trump administration's policies is fair enough "if you believe in tooth fairies and ludicrous supply-side economics."

On Monday, Office of Management and Budget Director Mick Mulvaney stood by the forecast and argued that economists are underestimating the benefits of Trump's proposal.

"That assumes a pessimism about America, about the economy, about the people, about its culture that we're simply refusing to accept," Mulvaney said. "We do not believe that [3 percent] is something fanciful."

Some Republicans instead focused on other parts of the budget, which includes a wave of cuts to benefit programs like welfare.

"Think about what it does. It sets a structure. It makes an investment into the military that has been cut year over year," House Majority Leader Kevin McCarthy said Tuesday on "Squawk Box. "He balances the budget over 10 years. He reforms welfare reform. So, he puts people back into work."

Also on "Squawk Box," former Sen. Max Baucus said the budget proposal is "going nowhere."

— CNBC's Ylan Mui contributed to this report.

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