President Donald Trump and Congressional Republicans’ tax cuts and spending increases will have serious impacts on the U.S. deficit, a new report by the nonpartisan Congressional Budget Office showed on Monday. The national budget is expected to surpass $1 trillion by 2020, two years earlier than expected.
The United States is predicted to spend $804 billion more than it makes in revenue this fiscal year which represents a significant increase from the previously estimated $563 billion. The country’s cumulative deficit will most likely balloon to $11.7 trillion from 2018 to 2027, $1.6 trillion higher than previous estimates, Newsweek writes.
The total debt is also projected to reach almost $29 billion in the next decade which would be the highest total debt since World War II. The CBO estimates that economic growth will slow down even though it is expected to be strong this year and the next.
“Between 2018 and 2028, real actual output and real potential output alike are projected to expand at an average annual rate of 1.9 percent,” wrote CBO director Keith Hall.
The report comes as a hit to Republicans campaigning on tax cuts in the 2018 midterm elections and a welcome benefit to Democrats.
“Today’s CBO report underscores the reality that the Republicans’ $1.5 trillion tax plan will increase our already large national debt,” wrote Democratic Senator Chris Van Hollen in a statement. “President Trump has given a huge windfall to the very rich and special interests – and put it on the nation’s credit card, asking working Americans to pay the bill.”
The senator also expressed worry that Republicans will use these predictions as an excuse to cut into programs such as Social Security, Medicare and Medicaid. Others as well spoke out against deficit spending and the damage it is already doing to the country’s economy.
“Today’s CBO report confirms that major damage was done to our fiscal outlook in just the past few months. This is the first forecast to take into account the recent tax and spending legislation, and it’s clear that lawmakers have added significantly more debt on top of an already unsustainable trajectory,” said Michael Peterson, President and CEO of the Peterson Foundation, a nonpartisan group that focuses on America’s fiscal challenges.
“This high and rising debt matters because it harms our economy, by crowding out public and private investment, reducing our fiscal flexibility, and lowering confidence and certainty,” he added.
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