WASHINGTON – The federal budget deficit is growing faster than expected, even as President Trump openly considered more tax cuts and other ideas that would add to government debt.
The deficit will reach $ 960 billion for the 2019 fiscal year, which ends Sept. 30, and $ 1 trillion for the 2020 fiscal year, the Congressional Budget Office said in updated forecasts released on Wednesday. Previously, it had projected at $ 896 billion deficit for 2019 and $ 892 billion for 2020. Those numbers would be even higher, if not lower-than-expected interest rates, which are reducing the cost of servicing the national debt.
Typically, the budget deficit shrinks when unemployment is low. Mr. Trump's administration has defied that trend.
He has not pushed Congress to enact any of the major cuts to federal spending that he lays out each year in his official budget proposal. Its tax cuts have come to an accelerating rate of growth, as Republicans promised they would. The budget office said on Wednesday that it expects growth of 2.6 percent this year and 2.1 percent in 2020, well below the 3 percent growth the trump administration has promised for those years.
Mr. Trump's indifference to deficits has shattered his campaign. And he has left his fellow Republicans, who won deficit-reduction measures under President Barack Obama at a cost to what is still a fragile economic recovery, in a bind. Mr. Trump wins a second term in office.
President Trump's moves to add more debt, even as they insist they return to shrinking the deficit to unilaterally reduce capital gains taxes, which would add $ 100 billion to payroll taxes, which could reduce by $ 75 billion a year for every percentage point cut in payroll tax rates.