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CBO report projects massive deficits during Trump administration

CBO report projects massive deficits during Trump administration

In a decade, the more red ink is expected to achieve $1.5 billion. What once would have been considered unthinkable is now projected to be routine.

Last year's tax overhaul, the two-year budget deal that led to higher spending caps for this year and next and the $1.3 trillion fiscal 2018 omnibus spending bill are the main contributors to the worsening fiscal picture compared to last year.

Speaker of the House Paul Ryan responds to a question about the spending bill vote in the U.S. Capitol in Washington, D.C., March 22, 2018.

Unless Congress acts to stem the tide of red ink, the deficit would climb to $1.5 trillion by 2028 - and it could reach $2 trillion by that year if lawmakers extend a number of temporary policies. Total deficits over the next decade would total almost $12.42 trillion. Debt held by the public will stand at a staggering $29 trillion by 2028, the analysis said, prompting a warning from CBO Director Keith Hall. On this path the debt would continue to rise indefinitely. When the costs of paying interest on that debt are included, the tax cuts' total addition to the deficit comes to $1.9 trillion, the CBO said. CBO attributes these economic trends to the three major laws mentioned above, along with rising federal budget deficits over the ten-year window.

Even these numbers likely understate the worsening fiscal outlook.

The new report said 10-year debt will now hit $12.4 trillion, after breaking the $1 trillion mark in 2020.

The CBO's latest projections are hardly surprising. "At a time of massive wealth and income inequality, we have got to repeal all of President Trump's tax breaks for the wealthy and big corporations and rebuild the disappearing middle class".




The economic growth promises to drop the nationwide unemployment rate below 4 percent starting this year, CBO predicts, though interest rates would rise more rapidly than the agency had earlier predicted, countering some of the positive economic impact of the tax cuts.

There is a nightmare scenario in which borrowers lose faith in the country's ability to pay back its debts, demanding higher interest rates on their loans and setting off a spiral of larger deficits and still-higher rates.

The POTUS has indeed surprised the country, as according to the CBS' estimate, the 2018 deficit is $242 billion more than the office calculated a year ago. Updated economic projections and technical changes to estimates offset the legislated deficit increases by $1.1 trillion. The eventual results could include lower living standards, a weaker military and deep cuts in critical government services and investments.

"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.

The longer we wait, the more painful the solutions will be.

The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility.


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