US federal deficit to reach $1tn next year, report says
|
| Debt held by public is expected to
reach 95% of GDP in next 10 years, the highest level since just
after the second world war |
| |
|
By Dominic Rushe |
The Guardian |
| |
 |
| Photograph: Mandel
Ngan/AFP/Getty Images |
US federal debt will top $1tn next year even
as Donald Trump explores tax cuts and other giveaways that are
only likely to increase the deficit.
According to figures released by the Congressional Budget Office
(CBO) on Wednesday the US national debt is growing faster than
expected and will reach $960bn for the 2019 fiscal year, which
ends 30 September, and $1tn for the 2020 fiscal year.
On current projections debt held by the public is expected to
reach 95% of gross domestic product (GDP) – the broadest measure
of the economy – in the next 10 years, its highest level since
just after the second world war.
The CBO previously predicted a $896bn deficit for 2019 and a dip
to $892bn for 2020.
Trump came to power criticizing the US’s huge debts and
promising to pay them off. Instead he has contributed to rising
debts by signing a $1.5trn tax cut bill and spending packages
that have not been accompanied by spending cuts.
The escalating debt load is being driven by sluggish economic
growth as well as spending and tax cuts. US GDP is expected to
reach 2.6% this year and fall to 2.1% in 2020, according to the
CBO.
As the economic expansion slows Trump has said he is exploring a
series of tax cuts to stimulate growth that will further deepen
debts.
Deficits usually shrink in times of high employment and the US
is experiencing the longest growth in job creation since records
began.
Government debt as a share of the economy is expected to rise
from 79% this year to 95% in 2029.
On the campaign trail Trump was a persistent critic of
government spending. In 2016 he said he would eliminate the
national debt “over a period of eight years”. |
| |
 |
| |
In July Congress reached a deal to increase
federal spending and raise the government’s borrowing limit in a
move that pushed the next budget discussion into 2020, after the
next election.
Maya MacGuineas, president of the Committee for a Responsible
Federal Budget, said: “The recent budget deal was a budget
buster, and now we have further proof. Both parties took an
already unsustainable situation and made it much worse. Debt is
now going to grow to almost the size of the economy within the
decade. If Congress keeps extending tax cuts, debt will likely
exceed the size of the economy within the decade.” |
| |
|
|
| |
| |
|
|
|
|
|
| |
|
 |
|
