U.S. Budget Deficit to Exceed $1 Trillion in 2020
The widening gulf is a result of the 2017 tax cuts plus more spending
AgnosticPreachersKid, Treasury Department WDC, CC BY 3.0
• less than 3 min read
The U.S. budget deficit will top $1 trillion this year, according to a new report from the nonpartisan Congressional Budget Office (CBO).
What that means: The government will spend $1.02 trillion more than it collects in 2020. The widening deficit is a result of the 2017 tax cuts and an increase in spending on federal programs.
The historical context: We haven’t seen deficits of this size during periods of low unemployment since World War II, CBO Director Phill Swagel said. Public debt is projected to reach 98% of GDP by 2030—its highest percentage since 1946.
The good news: “The economy is doing well,” Swagel stressed, thanks to strong job growth and consumer spending. The CBO projects GDP will expand at a “solid rate” of 2.2% in 2020.
Which makes the current deficit more concerning; after all, deficits are supposed to shrink in a strong economy. Fed Chair Jerome Powell, who we’ll hear from later today, said last year “the federal budget is on an unsustainable path.”
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