by Countable | Updated on 4.10.18
The Congressional Budget Office (CBO) published their first economic forecast since the passage of tax reform at the end of 2017. Though the report points to some initial economic improvements due to economic growth and increased employment rates, it also projects the deficit will grow rapidly unless Congress changes course. Here are highlights of the report:
The annual deficit will grow by $139 billion this year, to $804 billion. That’s $242 billion more than the office’s forecast in June 2017.
The overall deficit will grow to $33 trillion by 2028.
Government debt will total 96 percent of gross domestic product by 2028.
The tax overhaul specifically will only grow the economy by 0.7 percent from 2018 to 2028, while adding $1.8 trillion to the deficit.
Annual average economic growth will be 1.9 percent over the next ten years, though growth in this year should be 3.3 percent and 2.4 percent the next. Then rates will drop precipitously.
By 2023 interest costs on government debt annually will exceed the entire budget of the Pentagon. By 2028 interest costs will reach $915 billion, triple that of 2017.
The tax overhaul will add 1.1 million jobs over the next decade, and wages and salaries will increase annually by an average of 0.9 percent.
The tax overhaul will increase interest rates by half a percentage point and strengthen the dollar, though that would likely increase the trade deficit as Americans buy more imports.
CBO Director Keith Hall warned the New York Times that changing course must happen sooner rather than later:
"The longer you wait, the more draconian the measure have to be to fix the problem."
Are you concerned about the swiftly rising federal deficit, or not? What do you think the remedy or remedies are to this problem?
Tell us in the comments what you think, then use the Take Action button to tell your reps!
— Asha Sanaker
(Photo Credit: Congressional Budget Office)
Written by Countable
Trump's "tax cut" is a trojan horse. The GOP playbook goes like this- you throw a ghastly expensive war, or a ghastly expensive tax cut for the rich (to pay them back for all those campaign contributions) with a little sweetener for the middle class to keep it popular, and when the deficit pops from all the money they spent, declare we can no longer afford all the things we do for old people, kids & the poor & go after social programs. Speaker Paul Ryan's been after social security since college. (He's from Wisconsin, they breed a lot of cannibals, ghouls & killers, legislative & otherwise.) Those of us with a desire to see our nation care for the least of us and fortify institutions of the common good have a fight ahead of us. We can't buy into this idea that a budget gets balanced by taking bread out of the mouths of seniors who've paid in their whole lives, or breaking promises to people who've just started to pay into this marvelous engine of the common good. We balance the budget by passing the hat, and asking more from those that have gotten more by means of our workers, educated in our schools, by means of our roads & bridges, paid for by everybody, by means of our economic expansion areas paid for by everybody & our subsidized business loans paid for by everybody-nobody gets there alone. Nobody is a "self made man" no matter what they tell you, and those that got there should give a hand up to the next batch of strivers. We all pay taxes, no exceptions, because we are proud citizens that contribute to the common good.
That's how it works, Republicans explode the deficit, a Democrat president comes in and balances or starts to lower the budget. Republicans get back in power explode the budget repeat.
The GOP and the Trump administration are doing exactly what Donald J Trump has done to almost every business venture he has been involved in. A mixture of spiraling debt, mismanagement and ethically questionable “deals”.
The republicans have clearly sold their souls. Please develop bills to mitigate this travesty. Blue tsunami coming!
With all the complaining that Trump has done about Obama and the Democrats spending,THIS is the highest spending bill we’ve ever had.
If we would stop giving tax cuts to the rich and corporate welfare we might be able to pay our bills.
I think the long term Republican plan all along has been to increase the deficit until the government has no other choice but to slash everything, including and especially all so-called entitlements programs as well as public education. Rich people are trying to create a permanent, uneducated underclass that has no choice but to toil for very little wages and no benefits. They know they can't bring back slavery, but they can come close. Money is concentrated in Southeast Asia now, and there are over 2 billion people there,compared to our 360 million. It doesn't make sense that they are making things for Americans. Corporate executives can see that it would make them more money if the cheap labor for manufacturing were all here and the comsumers were all there. I actually used to joke about this, ten years ago, but ironically, the facts are supporting my conspiracy theory more all the time.
And for all of you who consider Medicare and Social Security entitlements, unless you are wealthy, you are going to need these programs when you get older to make ends meet.
And there was a consideration about reversing the tax law if the deficit reduction did not occur. I haven’t seen any tax reduction; I’m not rich enough. And businesses have not invested in the economy as the Republicans hoped. Trickle down economics doesn’t work! Laffer’s theories are a joke, and I’m not laughing.
"Fiscal responsibility", amirite? smh
Cutting taxes for the wealthy thereby raising the deficit another trillion dollars is unacceptable. Fix it!
What? The tax bill pushed by Trump was called the greatest benefit for American citizens ever! Didn’t Trump promise over and over that he would make us “great again” or was it “broke again”? When will the citizens realize that Trump talks out of both sides of his mouth? Another trillion in debt is not great again.
The deficit is rising because we spend more than we bring in. Big surprise with the giveaway to the wealthy and corporations in the GOP tax bill. The GOP could have tackled some of the write offs and lessened the impact on the deficit, but they didn’t.
Yes, thanks to our so-called Conservative “Tax Reform” Bill, we will be neck-deep in Debt in the VERY near Future...Thanks Republicans 🇺🇸
It appears that the next step for republicans is to “balance the budget” by passing a law requiring this. The $1.3 trillion budget will then need to be taken from social programs like social security, medicare, medicaid, aid to the poor, meals on wheels, etc, This is unconscionable! Please do not support such a bill or an add on to any bill with this in it.
This isn’t because of tax cuts, it’s because of out of control spending. Get it right.
Tax cuts to the rich and an ever growing, monstrous military budget... what did we expect? There's never enough money to put into public education, infrastructure, and social programs... but they always find the money to inflate our budget toward endless war.
Thank goodness corporations and the wealthy got their tax cut so they can weather the coming financial/fiscal storm. The rest of us, if republicans have their way, we’re on our own.
This was never about economic stimulus, never about middle class tax breaks, it was about moving more money to the top 1% and businesses. Watch! Corporate tax breaks are in stone, others are not. Now comes the full on attack of Social Security, Medicare and other Federally Funded health and nutrition programs. this is 1928 all over again!
I guess what we need to fix the deficit problem is to quit electing Republicans. Or at least elect Republicans that can think on their own and do things that are good for the country.