USA budget deficit to top US$1 trillion amid strong economy: CBO

USA budget deficit to top US$1 trillion amid strong economy: CBO

USA budget deficit to top US$1 trillion amid strong economy: CBO

The Concord Coalition said today that new Congressional Budget Office (CBO) projections showing federal deficits and debt steadily rising over the next 10 years and leaping to historic highs over the longer term are an alarming signal that action is required to put the budget on a more sustainable path. According to CBO, the average deficit over the last 50 years has been 1.5%. Debt held by the public, which excludes special Treasury securities held by government trust funds, is projected to equal almost the entire US economy within a decade.

The years beyond 2030 also look "daunting", the CBO said.

The recent surge in the deficit has followed passage of the 2017 Trump tax bill, which has failed to pay for itself with additional economic growth and revenues as promised by administration figures like Treasury Secretary Steven Mnuchin. If tax cuts are extended, instead of expiring in 2025, the CBO projects revenue will remain below the historical average (17.4 percent of GDP) over the coming 10 years.

The CBO is extra assured that the economic system will proceed to develop over the following 12 months, projecting 2.2 per cent GDP progress in 2020, up from its final projection in August of two.1 per cent. And the numbers are well below the 3% target the Trump administration laid out in its budget proposal past year.

CBO has long warned that rising deficits and debt are "unsustainable" and may eventually lead to a "debt crisis".

"But there's no question we need to slow down the rate of growth of government spending because we can't sustain these deficits growing at these levels", he said last week, while also promising more tax cuts, this time for middle-class Americans.

The federal agency predicted that the deficit against the overall gross domestic product would rise from 4.6% this year to 5.4% in 2030.

But there was no agreement on a course correction. Those have combined to deepen the government's deficit spiral well on into the future, with trillion-dollar deficits likely for as far as the eye can see.

Senate staff members move copies of President Trump's fiscal year 2020 budget on Capitol Hill in Washington, D.C., on March 11.

The CBO report landed amid an intensifying presidential campaign in which concerns about the deficit are not really an issue. According to the CBO, the cash deficits for Social Security and Medicare will contribute 2.1 percent of GDP to the deficit in 2020 rising to 6.2 percent in the later years of the long-term outlook (2041-2050). "That's what's squeezing all of the opportunities of this Congress to fund the national priorities, to include national security", said Rep. Steve Womack of Arkansas, the committee's ranking Republican.

His GOP counterpart on the committee, Rep. Steve Womack, the ranking Republican, pointed out that Mr. Yarmuth and fellow Democrats didn't even manage to write a budget past year.

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