Total deficit spending will increase by $11.7 trillion over the next 10 years, including an additional $1.58 trillion because of changes like the GOP tax law and the omnibus spending bill, according to a new report released by the Congressional Budget Office.
"The CBO's report exposes the staggering costs of the GOP tax scam and Republicans' contempt for fiscal responsibility", House Minority Leader Nancy Pelosi, D-Calif, said in a statement Monday. The Congressional Budget Office says tax and spending bills will push the deficit to $804 billion this year and almost $1 trillion for 2019. "In their craven haste to give corporations and the wealthiest 1% massive tax breaks, Republicans saddled our children and grandchildren with trillions of dollars of debt".
The new report said that by 2028, the debt load will exceed 96 percent of GDP. After that, however, the CBO expects economic growth to slow, largely due to slower growth in the labor force.
That means trillion-dollar deficits are the "new normal", says Stan Collender, author of The Guide to the Federal Budget, in a new column at Forbes. The CBO projects that by 2028 federal interest costs would exceed $900 billion, almost triple what they are this year in nominal terms, and roughly double as a percentage of GDP. That deal paved the way for Congress to pass a $1.3 trillion spending bill last month.
Those deficits will quickly build, doubling the government's main pool of debt over the next decade. The CBO says that government tax revenue is expected to total 17.5 percent of gross domestic product between 2019 and 2028, a decline from last year's estimate of 18.2 percent. It forecasts a deficit exceeding $1 trillion a year starting in 2020.
On Monday, the CBO estimated that the tax law that went into effect in January would boost real economic growth in the short term to 3.3 percent before it dropped back down below 2 percent in 2020. From 2021 through 2028, deficits will average 4.9 percent of GDP. During the campaign he advocated protecting numerous expensive programs - including Social Security and Medicare - and never squared the fiscal impact of the tax cuts he also favored. While some members of Congress care about reducing deficits, it is now clear that the Republican majority in both chambers and the Republican in the White House have little interest in being responsible stewards of the federal purse.
The deficit - the amount that Washington's spending exceeds its revenues - will expand to $804 billion in fiscal 2018, which ends on September 30, up from $665 billion in fiscal 2017, CBO said. Deficits can snowball, as larger deficits require larger interest payments, pushing the government to borrow more and more money to close the gap. All it will take are sizable tax increases.