04/12/2018

CBO Projects Soaring Federal Deficit

The budget deficit will exceed $1 trillion within two years

The Congressional Budget Office (CBO) forecasted earlier this week that the federal government’s budget deficit will exceed $1 trillion within two years, a projection that rankles conservatives on Capitol Hill. The nonpartisan CBO estimates that the sweeping tax law enacted at the end of last year will add nearly $1.9 trillion to the deficit over the next decade, even after accounting for a short-term boost to the economy. With the tax cuts and the $1.3 trillion spending package that Congress approved last month, CBO projects the U.S. will hit the $1 trillion deficit mark two years ahead of previous estimates.

“The new budget baseline projection in this (CBO) report shows, once again, how Republicans have failed to heed the lesson that tax cuts do not magically pay for themselves,” said House Minority Whip Steny Hoyer (D-MD). “... (These deficit projections) will make it even harder to maintain our infrastructure, our national security and our economic competitiveness.”

House Budget Committee Chairman Steve Womack (R-AR) did not dispute the CBO outlook and said the numbers were “sobering” and “unsustainable.”

“Without question, we have challenging work ahead,” Womack said, vowing to work with the budget committee to craft a responsible budget resolution for Fiscal 2019.

What irks conservatives even more is House leadership’s decision to vote on a balanced budget amendment this week, just weeks after approving the $1.3 trillion spending bonanza.

“There is no one on Capitol Hill, and certainly no one on Main Street, that will take this vote seriously,” Freedom Caucus Chairman Mark Meadows (R-NC) told POLITICO this week.

The balanced budget amendment, introduced by House Judiciary Chairman Bob Goodlatte (R-VA), would require that Congress not spend more than it receives in revenue. It also would require a true majority in both the House and Senate to pass tax increases and a three-fifths super-majority to raise the debt limit.

Hoyer called the Republican plan to vote on a balanced budget amendment this week “a disingenuous charade, an attempt to mask their hypocrisy when it comes to fiscal responsibility.”

Adding to the spotlight on spending this week are reports that House leaders and President Donald Trump have been discussing ways they might rescind funds from the recently-passed spending package.

“I hope it gets legs,” said Sen. John Kennedy (R-LA). "I’m embarrassed about the bill we passed."

This article was provided to OSAE by the Power of A and ASAE's Inroads.