By Jon Dougherty
(NationalSentinel) The U.S. government is slated to run trillion-dollar deficits for the foreseeable future, according to a new analysis from the Congressional Budget Office, but Congress and the White House seem oblivious to the impending financial disaster.
As reported by CNBC, this year the U.S. budget deficit will hit $960 billion but then average an eye-popping $1.2 trillion each year for the next decade, 2020-2029, CBO projected.
The network noted further:
The new deficit projection for 2019 rose $63 billion from the last report, which came out in May. The CBO says this is mainly because of the massive new budget deal, which passed both houses of Congress and was signed into law by Trump in early August.
“The nation’s fiscal outlook is challenging,” CBO Director Phillip Swagel said in the report. “Federal debt, which is already high by historical standards, is on an unsustainable course.”
The CBO has been predicting “unsustainable” federal budget deficits for years, driven mostly by ‘untouchable’ entitlement programs like Medicare — which is slated to go bust in a decade or so — Medicaid, and others.
During the 2016 campaign, President Donald Trump said he would eliminate federal budget deficits and lower the national debt but all attempts to do so by submitting budgets containing drastic cuts in spending have been rejected by Congress.
To get spending levels increased for necessary line items like defense, the president has been forced to sign off on budgets that also explode spending on social and benefits programs.
“To put [the budget] on a sustainable course, lawmakers will have to make significant changes to tax and spending policies,” such as increasing revenues, reducing spending or a combination of both, Swagel said.
The CBO report also notes:
- Real GDP is projected to grow to 2.3% in 2019
- But after 2019, annual output growth is expected to slow down to an average of 1.8% through 2029 — lower than the long-term historical average
- “That slowdown occurs primarily because the labor force is expected to grow more slowly than it has in the past,” the CBO says
- Federal debt held by the public is projected to grow to 95% of GDP in 2029 from 79% in 2019. The 2029 debt projection will be “its highest level since just after World War II”
- The recently passed budget deal is expected to add roughly $1.7 trillion to the cumulative deficits between 2020 and 2029
- The expected increase in deficits is partly offset, however, by a $1.1 trillion net reduction in the CBO’s projections of interest costs over the following 10 years
- That’s mostly because the CBO revised its forecast for interest rates downward from the prior report, which lowered its projections for net interest spending
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