CBO Projects $1.5 Trillion Deficits - and That's Being Optimistic

The deficit report card is in. Trillion dollars is now the new normal

CBO says the tax cuts will boost the economy by an average of 0.7 percent and create 1.1 million more jobs over the next decade than previously anticipated.

The new CBO analysis projects the U.S. will see the federal deficit rise above $1 trillion a year within two years - earlier than had been previously expected. According to the CBO, Washington's spending exceeds revenues and may reach $804 billion in fiscal 2018.

The report does say the US gross domestic product is likely to grow faster than previously thought this year. The CBO also estimated that certain health insurance premiums in the individual marketplace are projected to increase by 34% on average this year due to changes in the tax law.

The national debt is on track to approach 100 percent of gross domestic product (GDP) by 2028, said the nonpartisan CBO, which analyzes legislation for Congress. CBO attributes these economic trends to the three major laws mentioned above, along with rising federal budget deficits over the ten-year window. The economic growth promises to drop the nationwide unemployment rate below 4%, the CBO predicted. When the costs of paying interest on that debt are included, the tax cuts' total addition to the deficit comes to $1.9 trillion, the CBO said.

Annual deficits topped $1 trillion from 2009 to 2012, because of greater spending on social safety net programs and economic stimulus, as well as slumping tax receipts as the economy cratered. No mention of the "voodoo economics" idea of dodgy economists that lower taxes generates higher spending and lower deficits. In fact, the $1.21 trillion spent this year is over $50 billion above the original BCA caps, nearly $80 billion above President Obama's final budget request, $115 billion above the recommendations of the bipartisan Simpson-Bowles commission, and more than $143 billion above President Trump's request.

The nation's $21 trillion debt would spike to more than $33 trillion in after 10 years, with debt held by investors spiking to levels that would come close to equaling the size of the economy, reaching levels that many economists fear could spark a debt crisis.

Republicans claimed their economic policies would pay for themselves by stimulating growth. The political theory behind this combination was that Republicans needed to take advantage of their full control of government to pass the tax cuts Democrats opposed, which exclusively benefit the very rich.

House Budget Committee Chairman Steve Womack (R-Ark.) said that the report "sheds light on our nation's current fiscal challenges and guides us in mapping out a sustainable path for the future". Trump has ruled out cuts to Social Security and Medicare, and Capitol Hill Republicans have failed to take steps against the deficit since Trump took office.

But the flurry of recent legislation is making it hard for Republicans to continue blaming President Barack Obama and Democrats for the government's fiscal condition.

The CBO also said the deficit would continue to climb over that decade.

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