Federal deficit to hit $1 trillion earlier than expected

Federal deficit to hit $1 trillion earlier than expected

The Congressional Budget Office is projecting that the federal debt will rise steadily over the next 10 years to almost 100% of GDP by 2028 - an amount "far greater than the debt in any year since just after World War II".

The budget deficit will grow to 804 billion dollars this fiscal year, which ends on September 30, up from 665 billion dollars in fiscal 2017, according to the CBO's forecast.

"Turning to the budget projections, we estimate that the 2018 deficit will total $804 billion, $139 billion more than the $665 billion shortfall recorded in 2017".

"The federal budget deficit grows substantially over the next several years", said CBO Director Keith Hall on Wednesday after his agency released the report.

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CBO said the projected debt increase, approaching 100 percent of the Gross Domestic Product in 2028, "is far greater than the debt in any year since just after World War II".

"The CBO's latest report exposes the scam behind the rosy rhetoric from Republicans that their tax bill would pay for itself", Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerTrump tax plan makes rich pay larger share; why is the left against it? Real GDP will expand 3.3 percent in 2018 and 2.4 percent in 2019.

He want on decry a planned Balanced Budget Amendment vote in the House this week as a "sham".

"Now that those tax cuts are in place, I predict that deficits will once again morph into a dire problem - a scourge upon the nation - an excuse for Republicans to target Medicare, Medicaid, and Social Security for cuts", Schumer said. The expiration of lower individual tax rates at the end of 2025 will add to slowed economic growth then, the CBO added.

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Ultimately, neither party appears to have a deficit-reduction proposal that could get enough support from the other to pass.

Many economists believe that if deficits continue to rise and the national debt grows, government borrowing will "crowd out" private lending and force up interest rates. And if interest rates go up, the government would have to pay much more to finance the more than $14 trillion in Treasury debt held by investors.

Offsetting the rise in revenue, however, is a projected increase in outlays.

Besides, there is little pressure for action beyond a small chorus of deficit hawks.

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"It's all hand-waving and conjecture: There's no grounding in valid economic principles that this is a debt crisis", said Stephanie Kelton, a left-leaning economics and public policy professor at Stony Brook University and a former economic adviser to Sen.

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