The nonpartisan Congressional Budget Office found that the 2019 deficit will hit nearly 1 trillion dollars by 2019, largely because of President Trump and the GOP’s new tax law and a bipartisan $1.3 trillion spending package approved last month.
According to the new CBO report, this year’s federal budget deficit will rise to $804 billion and the deficit is projected to nearly hit $980 billion in 2019.
The $804 billion deficit amounts to 4 percent of the GDP and represents a $139 billion increase over last year’s deficit.
The report also found that the debt burden, the total amount the government owes relative to the size of the economy, will reach 96 percent of GDP by the end of the decade, its highest level since the end of World War II.
— BloombergQuint (@BloombergQuint) April 9, 2018
The Hill adds:
All those figures will grow if certain tax cuts that are set to expire toward the end of the decade are kept in place, according to CBO.
Higher deficits could lead to ballooning debt interest payments, a drop in capital stock and productivity, decreased fiscal flexibility in the event of a downturn and higher chances for a fiscal crisis, the report said.
CBO says economic growth from the GOP tax cuts will add 0.7 percent on average to the nation’s economic output over the coming decade. Those effects will only partially offset the deficit cost of the tax cuts.
The Trump administration repeatedly promised taxpayers that the cuts would pay for themselves.