https://www.wsj.com/articles/deficit-projected-to-top-1-trillion-starting-next-year-1531950742
Deficit Projected to Top $1 Trillion Starting Next Year
WASHINGTON—The Trump administration expects annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years, pushing the federal deficit above $1 trillion starting next year.
The revisions, which went largely unnoticed when the White House submitted its annual update to Congress last week, reflect the cost of federal spending increases agreed to earlier this year and higher interest payments.
The budget proposal released in February showed annual deficits totaling $7.1 trillion over 10 years. The latest revisions increase these cumulative deficits by $926 billion, to $8 trillion.
The report highlights the challenge the Trump administration faces in reducing deficits. Administration officials have said stronger economic growth would allow recent tax cuts to generate more revenue over the long run, offsetting initial declines in receipts from rate cuts.
But the latest projections show the deficit rising even though the administration projected an even stronger uptick in federal revenue.
While President Donald Trump “used to talk about creating such great economic growth to reduce the deficit, now you see a budget acknowledging a massive run-up due to policies he has supported,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which supports debt reduction.
“Their policies are not paired with a single recommendation to start making [the deficit] better,” said Ms. MacGuineas.
The White House budget office now estimates that the deficit will rise to nearly $1.1 trillion in the fiscal year that begins this October, or 5.1% of gross domestic product, up from $984 billion projected in February’s budget proposal. The U.S. ran a deficit of $666 billion for the fiscal year that ended Sept. 30, 2017, or 3.4% of GDP.
“Gigantic deficits are not good, and we’re going to run, as a share of GDP, 4%, 5%,” said Lawrence Kudlow, director of the White House National Economic Council, at a conference hosted by CNBC on Wednesday. “That’s not bad. I’ve seen worse.”
Since World War II, the U.S. has posted budget deficits that exceeded 5% of GDP in just two periods—in 1983 and from 2009 through 2012.
Deficit Projected to Top $1 Trillion Starting Next Year
WASHINGTON—The Trump administration expects annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years, pushing the federal deficit above $1 trillion starting next year.
The revisions, which went largely unnoticed when the White House submitted its annual update to Congress last week, reflect the cost of federal spending increases agreed to earlier this year and higher interest payments.
The budget proposal released in February showed annual deficits totaling $7.1 trillion over 10 years. The latest revisions increase these cumulative deficits by $926 billion, to $8 trillion.
The report highlights the challenge the Trump administration faces in reducing deficits. Administration officials have said stronger economic growth would allow recent tax cuts to generate more revenue over the long run, offsetting initial declines in receipts from rate cuts.
But the latest projections show the deficit rising even though the administration projected an even stronger uptick in federal revenue.
While President Donald Trump “used to talk about creating such great economic growth to reduce the deficit, now you see a budget acknowledging a massive run-up due to policies he has supported,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which supports debt reduction.
“Their policies are not paired with a single recommendation to start making [the deficit] better,” said Ms. MacGuineas.
The White House budget office now estimates that the deficit will rise to nearly $1.1 trillion in the fiscal year that begins this October, or 5.1% of gross domestic product, up from $984 billion projected in February’s budget proposal. The U.S. ran a deficit of $666 billion for the fiscal year that ended Sept. 30, 2017, or 3.4% of GDP.
“Gigantic deficits are not good, and we’re going to run, as a share of GDP, 4%, 5%,” said Lawrence Kudlow, director of the White House National Economic Council, at a conference hosted by CNBC on Wednesday. “That’s not bad. I’ve seen worse.”
Since World War II, the U.S. has posted budget deficits that exceeded 5% of GDP in just two periods—in 1983 and from 2009 through 2012.
