Trillion-dollar deficits come roaring back under Trump

Trump tax cuts forecast to send US deficit to $1 trillion in 2020

A new analysis says President Donald Trump's tax cuts and last month's big spending bill will send the federal deficit toward $1 trillion.

As the House prepares to vote this week on a largely symbolic balanced-budget amendment to the Constitution, its own budget watchdog delivered a stark reality check Monday that forecasts the return of $1 trillion-plus annual deficits and a ballooning public debt that will approach $29 trillion by the end of the next decade.

In its 2017 projection, the CBO estimated that by 2027 the national debt would comprise 88.9 percent of the gross domestic product, just below the level at which economists say its load would itself harm the economy.

The government is slated to spend $4.1 trillion this year: $2.5 trillion of that on entitlements, $1.3 trillion on defense and domestic discretionary spending such as education and the environment, and $316 billion on interest payments on the debt. GDP growth is forecast to slow down after 2020, in part because all of this economic stimulus is likely to drive up interest rates. It warns that interest rates on government borrowing will spike, with the benchmark 10-year Treasury note, now yielding 2.8 percent, will average a 3.0 percent interest rate this year and 3.7 percent next year.

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

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The tax law that President Donald Trump and congressional Republicans passed in December will cut government revenue by $1.3 trillion from 2018 to 2028, the CBO reported.

The CBO's report has been revised to incorporate the effects of a new $1.3 trillion government spending bill and the $1.5 trillion in Republican-led tax cuts approved previous year.

The CBO said the tax cuts and the additional spending will boost consumer demand, supercharging the economy. CBO attributes these economic trends to the three major laws mentioned above, along with rising federal budget deficits over the ten-year window. Numerous tax cuts are set to expire after 2025, while higher spending levels expire after two years.

The national debt, which has topped $21 trillion, is expected to soar to more than $33 trillion in 2028. "The American people deserve a Congress that is focused squarely on helping the middle class, not patronizing Kabuki theatre - like sham "balanced budget" votes - from Republicans who blew up the deficit to benefit wealthy special interests". That is when some of the new tax cuts are slated to expire, which would stabilize deficits at that level. Trump has ruled out cuts to social security or Medicare and Republicans on Capitol Hill have failed to take steps against the deficit since Trump took office. That plan is widely viewed as a symbolic measure with little chance of passing Congress or winning the necessary ratification from the states.

Trump has routinely ignored the debt and deficit.

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