The U.S. government will spend at least $1 trillion more than it collects in revenues in 2020 and will do so throughout this decade and probably beyond, according to the Congressional Budget Office (CBO).
That means this year the federal government will spend $1.28 for every $1.00 it takes in.
The CBO estimates that accumulated federal debt is projected to reach 81 percent of GDP this year, 98 percent by 2030, and 174 percent of GDP by 2049. At current spending rates, the public debt will grow from about $18 trillion at the end of this year to $31.4 trillion in 2030.
The deficits and national debt are projected to reach their highest levels since World War II.
The ongoing deficits will result from uncurtailed Congressional spending and the Trump tax cuts not offset by spending reductions.
The Federal Reserve’s enforced low interest rates are keeping the deficit and debt from rising higher and faster than they otherwise would.
Annual deficits were higher during the recovery from the 2008 recession. But now the distance between revenue and spending has remained high despite the economy’s recovery.
During his 2016 presidential campaign, Donald Trump said he thought the country could pay off its national debt within eight years. However, his spending policies and unfunded tax cut have sent the deficit and debt even higher than before.
Trump and other administration officials, including treasury secretary Steve Mnuchin, have pressed the long-standing argument that the tax cut will pay for itself through enhanced economic growth.
The CBO predicted in 2018, however, that the tax cuts would generate new revenue totaling no more than 25 percent of their cost to the federal budget.
The CBO also forecasts that U.S. economic growth will gradually fall from 2.2 percent this year to 1.7 after 2021 and unemployment will begin to edge up in 2022.
