CBO Predicts Persistently Large US Federal Deficit in Next Decade

12 April, 2018, 00:45 | Author: Charlene Valdez
  • Donald Trump's tax cuts and spending increases are forecast to inflate the US deficit

WASHINGTON (AP) - The combined effects of President Trump's tax cuts and last month's budget-busting spending bill is sending the government's budget deficit toward the $1 trillion mark next year, according to a new analysis by the Congressional Budget Office.

The rising deficit means that a larger part of the government's spending is paid for voluntarily by investors rather than compelled payments taken from taxpayers.

"As deficits accumulate in CBO's projections, debt held by the public rises from 78 percent of GDP (or $16 trillion) at the end of 2018 to 96 percent of GDP (or $29 trillion) by 2028", the report said.

The budget deficit will grow to 804 billion dollars this fiscal year, which ends on September 30, up from 665 billion dollars in fiscal 2017, according to the CBO's forecast.

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However, the non-partisan CBO said the deficit - the difference between what the government spends and what it receives through tax receipts - is expected to rise to $804bn in 2018 from $665bn in the previous year.

Annual deficits topped $1 trillion from 2009 to 2012, because of greater spending on social safety net programs and economic stimulus, as well as slumping tax receipts as the economy cratered. It is hard to imagine any cuts to Social Security, Medicare or other public programs, even though they make up a good portion of the budget - That would be a "political non-starter".

"It's going nowhere", said Sen. The total over the 10-year span beginning in 2017 was projected to be $9.4 trillion. Growth will be primarily driven by business investment, consumer spending and federal spending.

He want on decry a planned Balanced Budget Amendment vote in the House this week as a "sham".

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However, the nonpartisan group also upwardly revised the tax bill's projected impact on the federal deficit, saying it will cause the deficit to expand at a faster pace because the government will collect less revenue.

"The CBO's latest report exposes the scam behind the rosy rhetoric from Republicans that their tax bill would pay for itself", Schumer said in a statement Monday. That plan is widely viewed as a symbolic measure with little chance of passing Congress or winning the necessary ratification from the states. And not a word from the debt and deficit mob and those conservatives who reckon higher spending will be inflationary.

But if warnings of a future fiscal crisis turn out to be true, lawmakers might be forced to take painful steps, Hall warned, that would be more draconian than if they tackled the deficit now.

Even then, however, budget deficits north of $2 trillion might not be far off, she noted. Those surpluses turned to deficits after tax cuts under President George W. Bush, as well as sharp increases in military spending for the wars in Afghanistan and Iraq.

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