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)
Published Aug. 22

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."

ALSO IN THIS SECTION

  1. President Donald Trump speaks during a news conference with Australian Prime Minister Scott Morrison in the East Room of the White House, Friday, Sept. 20, 2019, in Washington. (AP Photo/Patrick Semansky) PATRICK SEMANSKY  |  AP
    Hunter Biden worked for a Ukrainian gas company.
  2. President Donald Trump speaks during a meeting with Australian Prime Minister Scott Morrison in the Oval Office of the White House, Friday, Sept. 20, 2019, Washington. EVAN VUCCI  |  AP
    The complaint, which the administration has refused to let Congress see, remains shrouded in mystery but is “serious” and "urgent.
  3. A man holds an inflatable alien at an entrance to the Nevada Test and Training Range near Area 51 Friday, Sept. 20, 2019, near Rachel, Nev. People gathered at the gate inspired by the "Storm Area 51" internet hoax. JOHN LOCHER  |  AP
    A man who was urinating near the gate was arrested and a woman was detained for an undisclosed reason, Lincoln County Sheriff Kerry Lee said.
  4. In this Sept. 13, 2019 file photo, young climate activists march with signs during a rally near the White House in Washington. At left is the Washington Monument. In late September 2019, there will be climate strikes, climate summits, climate debates, a dire climate science report, climate pledges by countries and businesses, promises of climate financial help and more. There will even be a bit of climate poetry, film and music. (AP Photo/Susan Walsh) SUSAN WALSH  |  AP
    Organizers expect millions to take part in marches, rallies and sit-ins for what could be the largest ever mass mobilization on climate issues.
  5. In this photo provided by Peter Sacco, a crowd gathers at a cordoned-off intersection near a shooting Thursday, Sept. 19, 2019, in a Washington D.C. neighborhood. Police say one man was killed and five other adults were wounded in a shooting in the courtyard of an apartment complex near Columbia Heights Metro Station in the nation's capital. PETER SACCO  |  AP
    Police say five victims in the Columbia Heights shooting were men and one was a woman.
  6. De Blasio launched his bid in May, but his campaign largely failed to take off. [TARA MCCARTY | Tampa Bay Times]
    De Blasio struggled to gain traction in a sprawling field of Democrats seeking the presidency. He announced his decision in an MSNBC interview on Friday.
  7. Jade McLain carries Thor out of a boat as she and Fred Stewart were rescued from their flooded neighborhood inundated by rains from Tropical Depression Imelda by Splendora Police officers on Thursday, Sept. 19, 2019, in Spendora, Texas. BRETT COOMER  |  AP
    By Thursday night, floodwaters had started receding in most of the Houston area, said the city’s mayor, Sylvester Turner.
  8. House Intelligence Committee Chairman Adam Schiff, D-Calif., speaks to reporters after the panel met behind closed doors with national intelligence inspector general Michael Atkinson about a whistleblower complaint, at the Capitol in Washington, Thursday, Sept. 19, 2019. J. SCOTT APPLEWHITE  |  AP
    The administration is keeping Congress from even learning what exactly the whistleblower is alleging.
  9. In this Wednesday, Sept. 18, 2019 photo, a billboard depicting Shiite spiritual leaders and volunteer fighters from the Iran-backed Popular Mobilization Forces who were killed in Iraq fighting Islamic State militants, is displayed in Basra, Iraq. As the U.S. and Israel step up their efforts to contain Iran, countries in Tehran’s orbit are feeling the heat. Nowhere is that being felt more than in Iraq, where Shiite forces tied to Iran pose a growing challenge to the government’s authority. NABIL AL-JURANI  |  AP
    Pro-Iranian militias across Lebanon, Syria, and Iraq are being targeted, both with economic sanctions and precision airstrikes hitting their bases and infrastructure.
  10. An American Airlines Boeing 737 Max 8 aircraft approaches Miami International Airport for landing in March. Bloomberg
    The 60-year-old veteran airline employee told investigators he was upset that union contract negotiations had stalled.
Advertisement
Advertisement
Advertisement