The White House has projected that the federal deficit will hit the $1 trillion mark and surpass it this fiscal year, reaching levels as those in the four years after the Great Recession.
“The 2019 deficit has been revised to a projected $1.0 trillion,” the White House Office of Management and Budget (OMB) wrote in its midyear review.
During his presidential campaign, President Donald Trump vowed to eliminate both the federal deficit and the federal debt, which has surpassed $22 trillion, The Hill informs.
However, Republicans reject the notion that their 2017 tax cuts would add $1.9 trillion to the deficit over a decade. The top White House economic adviser, Larry Kudlow, claimed the opposite last week, saying that they would pay for themselves soon.
Spending has likewise seen a sharp increase, with Republicans demanding massive expansions to defense expenditures and Democrats seeking equally big increases on domestic priorities such as health care and education.
The two chambers of Congress are involved in discussions again to up spending ahead of fiscal 2020, which begins October 1. And while supporters of such spending are trying to argue that the increasing deficit comes at a time of strong economic growth, economists warn that fiscal policy should be more restrained.
“The midsession review is just the latest reminder of the dangerous fiscal path that we’re on — and it drives home the point that we are missing a valuable opportunity to start managing our debt during a time of growth and high employment,” said Michael A. Peterson, CEO of the fiscally conservative Peter G. Peterson Foundation.