01/30/2020

CBO Predicts Deficit Will Top $1 Trillion

Democrats and Republicans alike are seeking reductions

This week, the Congressional Budget Office (CBO) predicted that the federal budget deficit will top $1 trillion annually over the next 10 years unless Congress makes “significant changes to tax and spending policies.”

The soaring deficit is fueled by increased borrowing by the federal government, though CBO predicted that interest rates for the next decade would be low, reflecting the Federal Reserve’s move to cut rates last year in response to slowing economic growth.

According to CBO, economic growth is expected to be 2.2 percent this year but will decline to 1.5 percent by 2025. The latest CBO forecast shows no indication that the 2017 tax cuts engineered by President Trump and congressional Republicans will boost economic growth, Democrats pointed out.

“This report once again confirms that despite the economic expansion he inherited, the fiscal outlook has worsened since President (Donald) Trump took office,” said House Budget Committee Chairman John Yarmuth (D-KY). “Under Trump, deficits have risen to heights not usually seen outside of recessions and major world wars. They have increased every year – an unusual trend given that deficits tend to fall with the unemployment rate.”

House Budget Committee Ranking Member Steve Womack (R-AR) agreed that CBO’s report shows the nation is “on an unsustainable trajectory” and said the first step in addressing the deficit is to put forward a budget, which did not happen last year.

“It is imperative that we put our country on a responsible fiscal path and deliver on our duty to the American people,” Womack said.

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