Budget Deficits And Debt Projections Look Much Worse Assuming "Current Policy"

The Congressional Budget Office projects the federal budget deficit will balloon in the coming years in large part because of deep tax cuts approved by congressional Republicans and President Donald Trump late last year

The Congressional Budget Office projects the federal budget deficit will balloon in the coming years in large part because of deep tax cuts approved by congressional Republicans and President Donald Trump late last year

With the passage of deep tax cuts late past year, annual United States budget deficits are expected to balloon over the next decade, the nonpartisan Congressional Budget Office said on Monday.

The CBO says that if current tax laws remain unchanged and spending stays the same, the federal budget deficit will grow substantially over the next few years. Deficits would grow to $1.5 trillion by 2028 - and could exceed $2 trillion if the tax cuts are fully extended and if Washington doesn't cut spending. Meanwhile, total debt is projected to reach 96 percent of gross domestic product, or almost $29 billion by 2028 - the highest total debt since WWII.

In the last fiscal year ending last September, the deficit was US$ 665 billion. The country's cumulative deficit will balloon to $11.7 trillion from 2018 to 2027, $1.6 trillion higher than previous estimates. Trump has ruled out cuts to social security or Medicare and Republicans on Capitol Hill have failed to take steps against the deficit since Trump took office. Lawmakers in recent years have been loathe to let tax cuts expire.

Some Republicans argued vociferously during the tax debate that tax cuts in the bill would pay for themselves, with Treasury Secretary Steven MnuchinSteven Terner MnuchinGOP tax law will add.9 trillion to debt: CBO CBO projects booming deficits Technology firms oppose tariffs, support negotiations with China MORE going so far as to say that they would ultimately reduce the national debt and deficits. The modern Republican Party has pioneered a completely novel theory: Governments should balance their budgets when run by Democrats, and run extremely large deficits when run by Republicans. In that case, "I would bet our debt will be around 101% of GDP by the end of 10 years", MacGuineas said. But if Mr. Trump gets his way and Congress makes the tax cuts permanent, then the fiscal picture could be even worse.

"The bigger the debt, the bigger the chance of a fiscal crisis", Hall said Monday.

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"That is unacceptable", said Sen.

The government has been able to finance its debt relatively cheaply because of a decade of historically low interest rates since the recession.

Republicans treated deficits of this scale as unsafe portents of civilizational collapse during Barack Obama's first term, when the economy was recovering from the greatest financial crisis in three-quarters of a century. The economic growth promises to drop the nationwide unemployment rate below 4%, the CBO predicted.

The increasing deficits could, over time, make it more hard for the USA government to fund growth of domestic and defense programs.

The CBO also said the deficit would continue to climb over that decade.

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