Advertisement
  1. Nation & World

Report shows U.S. deficit to exceed $1 trillion next year

President Donald Trump waves to the crowd after arriving on Air Force One at Louisville International Airport in Louisville, Ky., Wednesday, Aug. 21, 2019. Trump is in town to speak at the American Veterans (AMVETS) 75th National Convention. (Associated Press)
President Donald Trump waves to the crowd after arriving on Air Force One at Louisville International Airport in Louisville, Ky., Wednesday, Aug. 21, 2019. Trump is in town to speak at the American Veterans (AMVETS) 75th National Convention. (Associated Press)
Published Aug. 22, 2019

WASHINGTON — The federal budget deficit is expected to balloon to more than $1 trillion in the next fiscal year under the first projections taking into account the big budget deal that President Donald Trump and Congress reached this summer, the Congressional Budget Office reported.

The return of $1 trillion annual deficits comes despite Trump's vow when running for office that he would not just balance the budget but pay down the entire national debt.

"The nation's fiscal outlook is challenging," said Phillip Swagel, director of the nonpartisan CBO. "Federal debt, which is already high by historical standards, is on an unsustainable course."

The office on Wednesday upped this year's deficit projection by $63 billion and the cumulative deficit projection for the next decade by $809 billion. The higher deficit projections come even as the CBO reduced its estimate for interest rates, which lowers borrowing costs, and as it raised projections for economic growth in the near term.

The number crunchers at CBO projected that the deficit for the current fiscal year will come to $960 billion. In the next fiscal year, which begins Oct. 1, it will exceed $1 trillion.

The CBO said the budget deal signed into law earlier this month, which took away the prospect of a government shutdown in October and the threat of deep automatic spending cuts, would boost deficits by $1.7 trillion over the coming decade. Increased spending on disaster relief and border security would add $255 billion. Downward revisions to the forecast for interest rates will help the picture, trimming $1.4 trillion.

Swagel said the federal debt will rise even higher after the coming decade because of the nation's aging population and higher spending on health care.

To put the country on sustainable footing, Swagel said, lawmakers will have to increase taxes, cut spending or combine the two approaches.

The CBO projects that the economy will expand more slowly, from 2.3% this year to 1.8% on average in the next four years. The assumption reflects slower growth in consumer spending and government purchases, as well as the effect of trade policies on business investment.

It also projects the unemployment rate will remain close to its current level of 3.7% through the end of 2020 and then rises to 4.6% by the end of 2023.

The CBO's estimate is the first to reflect the hard-won budget and debt deal signed into law earlier this month.

"The recent budget deal was a budget buster, and now we have further proof. Both parties took an already unsustainable situation and made it much worse," said Maya MacGuineas, president of the private Committee for a Responsible Federal Budget.

MacGuineas said lawmakers should ensure the legislation they enact is paid for and redouble efforts to control the growth in health care costs and restore the solvency of the Social Security program. Her organization is focused on educating the public on issues with significant fiscal policy impact.

Senior White House adviser Kellyanne Conway pivoted to the president's desire to fund the military and other programs when asked about the report.

"We're always concerned about the deficit," Conway said. "We also need to fund a lot of the projects and programs that are important to this country."

YOU MIGHT ALSO LIKE

  1. FILE - This Jan. 9, 2020 file photo released by the California Department of Corrections and Rehabilitation shows Jonathan Watson. Watson has confessed that he beat two child molesters to death with a cane while behind bars and says his urgent warning to a counselor that he might become violent was ignored. (California Department of Corrections and Rehabilitation via AP,File)
  2. Roger Stone accompanied by his wife Nydia Stone, left, arrives for his sentencing at U.S. District Court in Washington, Thursday. Stone, a staunch ally of President Donald Trump, faces sentencing Thursday on his convictions for witness tampering and lying to Congress. (AP Photo/Manuel Balce Ceneta)
  3. Police stand guard near the scene of a shooting in central Hanau, Germany Thursday. German police say several people were shot to death in the city of Hanau on Wednesday evening. (AP Photo/Michael Probst)
  4. Korri Loader, a friend of the victims of a car fire, sits at a makeshift memorial, Thursday, near the scene of a car fire which claimed the lives of a mother and her three young children in Brisbane, Australia. Hannah Baxter, 31, and her children Aaliyah, 6, Lainah, 4, and Trey, 3, died after their car was set alight on a street in suburban Brisbane on Wednesday morning. (Dan Peled/AAP Image via AP)
  5. Democratic presidential candidate, former New York City Mayor Mike Bloomberg talks with Sen. Elizabeth Warren, D-Mass., during a break at a Democratic presidential primary debate Wednesday, in Las Vegas, hosted by NBC News and MSNBC. (AP Photo/John Locher)
  6. In this Jan. 22, 2020, file photo, Attorney General William Barr arrives for an ceremony at the Department of Justice in Washington, to announce the establishment of the Presidential Commission on Law Enforcement and the Administration of Justice, and its commissioners. Barr has told people close to him he’s considering quitting his post after President Donald Trump wouldn’t heed his warning to stop tweeting about Justice Department cases. (AP Photo/Michael A. McCoy, File)
  7. In this March 14, 2012, file photo, former Illinois Gov. Rod Blagojevich speaks to the media outside his home in Chicago as his wife, Patti, wipes away tears a day before reporting to prison after his conviction on corruption charges. President Donald Trump is expected to commute the 14-year prison sentence of Blagojevich. The 63-year-old Democrat is expected to walk out of prison later Tuesday, Feb. 18, 2020. (AP Photo/M. Spencer Green, File)
  8. In this Aug. 8, 2015, file photo former owner of the San Francisco 49ers Edward DeBartolo, Jr., is interviewed before the Pro Football Hall of Fame ceremony at Tom Benson Hall of Fame Stadium in Canton, Ohio. President Donald Trump pardoned DeBartolo, who was convicted in gambling fraud scandal. (AP Photo/Gene J. Puskar, File)
  9. In this Nov. 7, 2019 file photo, the first panels of levee border wall are seen at a construction site along the U.S.-Mexico border, in Donna, Texas. The Trump administration said Tuesday that it will waive federal contracting laws to speed construction of the border wall with Mexico. (AP Photo/Eric Gay, File)
  10. Democratic presidential candidate Mike Bloomberg gives his thumbs-up after speaking during a campaign event at Hardywood Park Craft Brewery in Richmond, Va., Feb. 15, 2020. (James H. Wallace/Richmond Times-Dispatch via AP)
  11. In this Wednesday, Feb. 12, 2020, photo, a statue stands outside the Boys Scouts of America headquarters in Irving, Texas. The Boy Scouts of America has filed for bankruptcy protection as it faces a barrage of new sex-abuse lawsuits. The filing Tuesday, in Wilmington, Delaware, is an attempt to work out a potentially mammoth compensation plan for abuse victims that will allow the 110-year-old organization to carry on. (AP Photo/LM Otero)
  12. In this Feb. 13, 2020, file photo, a security guard stands near the quarantined Diamond Princess cruise ship in Yokohama, near Tokyo. After 14 days, an extraordinary quarantine of the Diamond Princess cruise ship ends Wednesday, with thousands of passengers and crew set to disembark over the next several days in the port of Yokohama. (AP Photo/Jae C. Hong, File)
Advertisement
Advertisement
Advertisement