UNITED STATES (OBSERVATORY) – The United States is moving toward an annual budget deficit of over $ 1 trillion by 2020 after tax cuts and rising public spending, according to the Congressional Budget Office.
While these measures will temporarily support the US economy, they will exacerbate long-term debt, the office said.
He added that the United States debt may rise to a level similar to debt levels during World War II, and the global financial crisis.
He warned that it would have “serious negative consequences” for the United States.
The report by the Congressional Budget Office was revised to include the effects of the new $ 1.3 trillion government spending bill and the $ 1.5 trillion tax cuts that Republicans adopted last year.
The Bureau raised its forecast for economic growth this year and next year by 3.3 percent and 2.4 percent, respectively.
However, the Congressional Budget Office, a nonpartisan entity, said the deficit – the difference between government spending and tax revenues – is expected to rise to $ 804 billion in 2018, from $ 665 billion a year earlier.
The budget deficit is expected to rise to $ 1 trillion by 2020.
– High debt –
The bureau said it expected the cumulative US deficit to rise to $ 11.7 trillion over the next decade, compared to the previous forecast of $ 10.1 trillion.
He added that the debt would reach $ 28 trillion, or about 96 percent of GDP, by 2028.
The deficit will be even greater if the tax cuts for individuals and families do not end as scheduled.
“Such high and rising debt will have serious negative consequences for the budget and the nation,” the office said, including reducing the government’s flexibility in introducing new policies and making them vulnerable to financial shocks.
The report is expected to raise concerns that China – as the largest foreign creditor of the United States – will take advantage of it during the current trade dispute.
Democrats used the report to criticize the Republicans.
Senator Chuck Schumer, of New York, said the report “exposes the deception behind Republican rhetoric that their tax bill will fund itself,” warning that Republicans will now use increasing debt to call for cuts in welfare programs, such as social security.