CBO forecasts the return of trillion-dollar deficits

Rosemary Collier
April 12, 2018

In the next few years, deficits will "grow substantially" before stabilizing in 2023, resulting in a projected cumulative deficit of $11.7 trillion for 2018-2027, the CBO said.

The report projects economic growth to slow after 2019, with projected deficits increasing "markedly" since the CBO's last report in June 2017.

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Numerous new major tax cuts and huge spending commitments introduced by the Donald Trump administration since he took office 18 months will really begin to be felt in terms of treasury coffers by the end of his first term. "Federal debt is projected to be on a steadily rising trajectory throughout the decade". Notably, and in keeping with the anti-intellectual spirit of the times, conservatives have not even bothered formulating a rationale for increasing the deficit during the peak of an economic expansion.

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There were $1 trillion deficit spending years most recently under President Barack Obama, primarily due to the economic downturn during the Great Recession, but deficit spending had been decreasing in recent years.

The national debt, which has topped $21 trillion, is expected to soar to more than $33 trillion in 2028. "From day one, the Republican agenda has always been to balloon the deficit in order to dole out massive tax breaks to the largest corporations and wealthiest Americans, and then use the deficit as an excuse to cut Social Security and Medicare".

The economic growth promises to drop the nationwide unemployment rate below 4 percent, CBO predicts.

Those cuts made when "the economy was already at or close to full employment ... turned economic logic on its head [and] this year's bipartisan spending agreement contributed further to the ill-timed stimulus", the authors write.

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"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.

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.

"Anyone who argues this course can continue is living with blinders", said Campaign to Fix the Debt Co-chairmen Judd Gregg, a former GOP senator, and Ed Rendell, a former Democratic governor.

The agency notes that its projections, especially those for economic growth, however, are "more uncertain than usual this year because they incorporate estimates of the economic effects of the recent changes in fiscal policy", which are themselves uncertain.

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