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U.S. NEWS Tuesday 10 april 2018

Analysis: Tax cuts, spending to raise deficit to $1T by 2020

By ANDREW TAYLOR benefit wealthy special in-
WASHINGTON (AP) — The terests."
combined effect of Presi- The White House is also like-
dent Donald Trump's tax ly to propose rolling back
cuts and last month's bud- some of the spending in-
get-busting spending bill is creases in the government-
sending the federal deficit wide funding bill, target-
toward the $1 trillion mark ing domestic programs
next year, according to a backed by Democrats, but
new analysis by the Con- the idea isn't gaining much
gressional Budget Office. traction on Capitol Hill.
The CBO report says the na- "It's going nowhere," said
tion's $21 trillion debt would Sen. Lindsey Graham, R-
spike to more than $33 tril- S.C. "We made a deal."
lion in 10 years, with debt Republicans are unlikely to
held by investors spiking pass even a nonbinding
to levels that would come budget blueprint, instead
close to equaling the size opting to take a pause in
of the economy, reaching the heat of election sea-
levels that many econo- son.
mists fear could spark a "Without question, we have
debt crisis. challenging work ahead,"
Republicans once laced In this March 23, 2018, file photo, a copy of the $1.3 trillion spending bill is stacked on a table in said House Budget Com-
into President Barack the Diplomatic Room of the White House in Washington. mittee Chairman Steve
Obama for trillion-dollar- Associated Press Womack, R-Ark., who
plus deficits but mostly fell promised he will be "work-
quiet on Monday's news. rise more rapidly than the said CBO Director Keith Hall. vious budget limits by $300 ing with my colleagues in
CBO says economic growth agency had earlier pre- "In particular, the likelihood billion over this year and the days ahead to craft a
from the tax cuts will add dicted, countering some of of a fiscal crisis in the United next — House GOP lead- responsible budget plan."
0.7 percent on average the positive economic im- States would increase." ers have scheduled a vote Many economists believe
to the nation's economic pact of the tax cuts. Republicans controlling this week on a proposed that if deficits continue to
output over the coming The report paints an unre- Washington have largely amendment to the Con- rise and the national debt
decade. Those effects will lentingly bleak picture of lost interest in taking on the stitution to require a bal- grows, government bor-
only partially offset the defi- the federal deficit, predict- deficit, an issue that has anced federal budget. The rowing will "crowd out" pri-
cit cost of the tax cuts. The ing it will hit $804 billion this fallen in prominence in re- vote is sure to fall well short vate lending and force up
administration had prom- year, rise to just under $1 tril- cent years. Trump has ruled of the two-thirds required to interest rates. And if interest
ised the cuts would pay for lion for the upcoming bud- out cuts to Social Security pass and is being rushed to rates go up, the govern-
themselves. get year and permanently and Medicare, and Capi- a vote without hearings or ment will have to pay much
Instead, Monday's report breach the $1 trillion mark tol Hill Republicans have committee debate. more to finance the more
estimates that the GOP tax in 2020 unless Congress failed to take steps against "The CBO's latest report ex- than $14 trillion in Treasury
bill, which is Republican- stems the burst of red ink. the deficit since Trump took poses the scam behind the debt held by investors.
controlled Washington's The government would bor- office. rosy rhetoric from Republi- Last year's deficit regis-
signature accomplishment row about 19 cents of every But if warnings of a fu- cans that their tax bill would tered $665 billion, which
under Trump, will add $1.8 dollar it spends this year. ture fiscal crisis turn out to pay for itself," said top was well below the record
trillion to the deficit over the Deficits would grow to $1.5 be true, lawmakers might Senate Democrat Chuck $1.4 trillion posted during
coming decade, even af- trillion by 2028 — and could be forced to take pain- Schumer of New York. "The Obama's first year in office,
ter its positive effects on the exceed $2 trillion if the tax ful steps, Hall warned, that American people deserve when the Great Recession
economy are factored in. cuts are fully extended and would be more draconian a Congress that is focused led to plunging revenues
The economic growth if Washington doesn't cut than if they tackled the squarely on helping the and a spike in spending.
promises to drop the na- spending. deficit now. middle class, not patron- The deficit settled be-
tionwide unemployment "Such high and rising debt With conservatives com- izing Kabuki theatre — like low $500 million for part
rate below 4 percent start- would have serious nega- plaining about the $1.3 tril- sham 'balanced budget' of Obama's second term
ing this year, CBO predicts, tive consequences for the lion catchall spending bill votes — from Republicans but has steadily risen since
though interest rates would budget and the nation," — which blew through pre- who blew up the deficit to then.q