CBO: GOP policies add almost $1.6 trillion to deficit

12 April, 2018, 00:43 | Author: Edward Snyder
  • Trump tax cuts forecast to send US deficit to $1 trillion in 2020

The country's cumulative deficit will balloon to $11.7 trillion from 2018 to 2027, $1.6 trillion higher than previous estimates.

CBO stated that, "Such high and rising debt would have serious negative consequences for the budget and the nation".

The report comes as a hit to Republicans campaigning on tax cuts in the 2018 midterm elections, and a boon to Democrats looking to point out the hypocrisy of Republicans who once complained about President Barack Obama's spending and claimed to be deficit hawks.

Between the lines: Republicans have spent almost a decade campaigning on fiscal restraint.

Democrats accused Republicans of agitating for just that outcome, saying the tax cuts were created to starve the government of money to pave the way for those cuts.

"It's going nowhere", said Sen. "In their craven haste to give corporations and the wealthiest 1% massive tax breaks, Republicans saddled our children and grandchildren with trillions of dollars of debt".

The CBO also said the deficit would continue to climb over that decade. Debt held by the public, which has doubled in the past 10 years as a percentage of gross domestic product (GDP), approaches 100 percent of GDP by 2028 in CBO's projections.

Perhaps even more striking is the employment picture, where the economy is going gangbusters.

The CBO estimated that potential economic growth will be elevated over the next two years but long term will average 1.9 percent a year.

"To address our federal debt, we must slow the growth of entitlement spending, increase revenues with a growing economy, and make responsible spending cuts", Lankford said in a statement. Yields move in the opposite direction from bond prices, rising when the prices of bonds paying fixed interest rates fall. By 2020 - just as Mr. Trump is facing voters for re-election - GDP growth will have slipped back below 2 percent.

The national debt, which has topped $21 trillion, is expected to soar to more than $33 trillion in 2028. Lawmakers in recent years have been loathe to let tax cuts expire.

The Trump administration had promised the cuts would pay for themselves. In a decade, the red ink is expected to reach $1.5 trillion.

In late March, President Trump signed a $1.3 trillion spending plan to fund the government through September.

The government would borrow about 19 cents of every dollar it spends this year. By 2020, when Mr. Trump is up for re-election, that will be 22 cents.

Analysts say the debt problems could get worse. All it will take are sizable tax increases.

House Republicans are also expected to vote this week on a balanced-budget amendment to the Constitution, which would force federal revenue and spending to balance.



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