The U.S. deficit -- which is already at a six-year high and a nearly 17 percent increase from the year-ago period -- could climb as high as $1 trillion by the end of 2019, according to the Committee for a Responsible Federal Budget (CRFB).
Continue Reading Below
In October, the U.S. Treasury Department released the nation’s monthly bank statement, revealing a deficit of $779 million. But unless spending cuts are made and lawmakers “extend the costly tax cuts,” it’s likely to keep ballooning, according to the CRFB.
Last year, Republicans passed the largest tax overhaul since President Ronald Reagan occupied the Oval Office, permanently slashing the corporate tax rate to 21 percent from 35 percent and temporarily reducing individual taxes. If the cuts remain in place, the deficit could climb above $2 trillion within the next decade, the CRFB noted.
In order to address the rising deficit and national debt, which has skyrocketed to more than $21.6 trillion (interest alone on that exceeds $523 billion), President Trump in October announced an initiative to cut spending by 5 percent across his Cabinet’s departments.
Part of Trump’s solution -- dubbed the “nickel plan” -- requires each Cabinet department to slash the “fat and waste” in the government by cutting 5 percent from the budget by fiscal year 2020. Congress already approved a defense spending bill in September, so the cuts won’t apply to the military. Critics, however, warn that it doesn’t really tackle the bulk of the problem: ballooning Social Security and Medicare payments.
The nonpartisan public policy organization also warned that an economic boost seen throughout 2018 is likely to weaken. It projected that the economy will grow by 3 percent in the entirety of 2018 and 2.8 percent in 2019, before cooling to somewhere between 1.6 and 1.9 percent per year for the remainder of the decade.