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WASHINGTON – The federal budget deficit is growing faster than expected, even as President Trump is openly considering further tax cuts and other ideas that could increase public debt.
The deficit will reach $ 960 billion for the 2019 fiscal year, which will end on September 30, and a trillion dollars for the 2020 fiscal year, the Congressional Budget Office said in updated forecasts released Wednesday. Previously, it projected a deficit of $ 896 billion for 2019 and $ 892 billion for 2020. These figures would be even higher, if not for lower than expected interest rates, which would reduce the cost of servicing the national debt.
The rising deficit forecast is the result of weak federal revenue growth following the introduction of Trump's 2017 tax cuts and several bipartisan agreements to increase domestic and non-discretionary military discretionary spending. defensive, which Mr. Trump promulgated.
In general, the budget deficit is reduced when unemployment is low. Trump's administration challenged this trend.
He did not urge Congress to adopt any of the major cuts in federal spending that he proposes every year in his official budget proposal. His tax cuts are not about to pay for faster economic growth, as the Republicans had promised. The budget office announced on Wednesday that it was forecasting growth of 2.6 percent this year and 2.1 percent in 2020, well below the administration's growth of more than 3 percent. Trump for those years.
Trump's indifference to deficits broke his election promise not only to balance the budget, but to repay the entire national debt. And he left his Republican compatriots, who got deficit reduction measures under President Barack Obama at the cost of the still fragile economic recovery, in a stalemate. Congressional Republicans largely subscribed to Trump's measures to increase his debt, even though they insist they tighten the deficit if Trump wins a second term.
The president recently considered unilaterally reducing the capital gains tax, which is expected to add $ 100 billion to deficits over the next decade, as well as payroll taxes that could reduce revenues by $ 75 billion. dollars a year. point of reduction of the rates of the payroll tax.
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