GOP tax law will add $1.9 trillion to debt: CBO

Donald Trump speaks during a campaign event in Hartford Conn. in April 2016

The Congressional Budget Office on Monday said it expects the USA budget deficit to reach $804 billion this year and to exceed $1 trillion in 2020.

"If current laws governing taxes and spending generally remained unchanged, the federal budget deficit would grow substantially over the next few years", the nonpartisan Congressional Budget Office wrote in its 10-year budget forecast, "with accumulating deficits driving debt held by the public to almost 100 percent of GDP by 2028".

This fiscal calendar year, which ends September 30, the budget deficit is expected to complete $804 billion, up from £ 665 billion last fiscal calendar year, according to the C.B.O. projections.

"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". Deficits would grow to $1.5 trillion by 2028 - and could exceed $2 trillion if the tax cuts are fully extended and if Washington doesn't cut spending.

Net outlays for interest paid on federal debt are projected to roughly triple what they are this year in nominal terms and roughly double as a percentage of GDP, according to the CBO. On the Senate floor, Minority Leader Chuck Schumer (D-N.Y.) said the report is "a reminder of how unserious the current Republican Party is about deficits".

For 2018, the deficit is expected to top $800 billion, about $140 billion more than the shortfall past year.

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House Republicans have said they will take up a measure to balance the budget, now that lawmakers have returned from a two-week recess. The expiration of lower individual tax rates at the end of 2025 will add to slowed economic growth then, the CBO added.

"The largest effects on GDP over the decade stem from the tax act", according to the CBO. 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.

And as the government borrows more, it risks crowding out private investment that would have stimulated more economic growth, the CBO warned.

Besides, there is little pressure for action beyond a small chorus of deficit hawks. Bernie Sanders, I-Vermont. "It's just conjecture". "The American people deserve a Congress that is focused squarely on helping the middle class, not patronizing Kabuki theatre - like sham "balanced budget" votes - from Republicans who blew up the deficit to benefit wealthy special interests".

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