Donald Trump’s WH Projects $1 Trillion Deficit For 2019 (#GotBitcoin?)
The White House projects that the federal deficit will surpass $1 trillion this year, the only time in the nation’s history the deficit has exceeded that level, excluding the four-year period following the Great Recession. Donald Trump’s WH Projects $1 Trillion Deficit For 2019 (#GotBitcoin?)
“The 2019 deficit has been revised to a projected $1.0 trillion,” the White House Office of Management and Budget (OMB) wrote in its midyear review.
As a candidate, President Trump promised to wipe out not only the deficit but the entire federal debt, which has surpassed $22 trillion.
Republicans cast aside projections that their 2017 tax reform law would add $1.9 trillion to the deficit over a decade. Larry Kudlow, the top White House economic adviser, claimed just last week that the tax cuts were on track to pay for themselves.
Spending has also shot up as a result of bipartisan budget deals, in which Republicans sought massive increases in defense expenditures and Democrats sought equal increases on domestic priorities such as health care and education.
Leaders of the Democratic-controlled House and Republican-controlled Senate and the White House are again in discussions to increase spending ahead of fiscal 2020, which begins Oct. 1, and a looming deadline to raise the debt ceiling.
Budget hawks noted with dismay that the rising deficit was taking place at a time of strong economic growth, when economists say fiscal policy should be more restrained.
“The midsession review is just the latest reminder of the dangerous fiscal path that we’re on – and it drives home the point that we are missing a valuable opportunity to start managing our debt during a time of growth and high employment,” said Michael A. Peterson, CEO of the fiscally conservative Peter G. Peterson Foundation.
The OMB projection is actually $91 billion lower than its previous estimate, largely because of technical provisions and somewhat lower than expected mandatory and interest spending. Donald Trump’s WH Projects, Donald Trump’s WH Projects,Donald Trump’s WH Projects
Spending Agreement Marks End of Obama-Era Deficit Reduction Push
Mnuchin-Pelosi accord curbs spending limits, specter of automatic budget cuts
The House is expected on Thursday to approve a two-year spending agreement that also lifts the government’s borrowing limit, the first step in ringing the death knell on fiscal controls enacted in 2011 to curb federal deficits.
The agreement, reached by Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D., Calif.) on Monday, effectively ends much of the 2011 Budget Control Act, which set limits on spending for each fiscal year. Without regular agreements to raise spending above the limits set in that law, automatic cuts known as sequestration would slash spending on a myriad of federal programs.
Republicans negotiated the legislation with President Obama to keep federal deficits in check in the wake of the recession.
The new accord raises federal spending above the limits by $320 billion over two years and ends most of the automatic cuts.
President Trump on Thursday urged House Republicans, many of whom have criticized the spending increases in the agreement, to back the deal.
“House Republicans should support the TWO YEAR BUDGET AGREEMENT which greatly helps our Military and our Vets,” he wrote on Twitter. “I am totally with you!”
Congress has effectively avoided the bulk of the cuts set in the 2011 law with previous two-year budget agreements, in 2013, 2015 and 2018. Monday’s agreement also takes the threat of automatic cuts off the table, providing lawmakers even more flexibility to increase spending beyond 2021.
Members of both parties have celebrated the end of the threat sequestration, while some conservatives have bemoaned that federal spending could balloon without it. Those would have reduced overall federal spending by 10% early next year, trimming $71 billion in military spending and $55 billion in domestic spending, compared to current levels.
“I think it’s marvelous. It allows Congress to do what Congress should do, and that’s legislate on an annual basis,” said Sen. Kevin Cramer (R., N.D.), a member of the Senate Budget Committee. “The Budget Control Act, while it was a disciplinary tool, it was far too draconian, especially on national defense.”
The Senate is expected to vote on the Mnuchin-Pelosi deal next week.
With the spending caps no longer in place after 2021, a $320 billion increase above the caps over the next two years will likely grow to $1.7 trillion more in projected spending over the next decade, according to estimates from the Committee for a Responsible Federal Budget. Debt as a share of gross domestic product would rise from 78% this year to a projected 97% by the end of 2029, compared with 92% under current law.
“It’s almost as large as reversing the entirety of the Budget Control Act and almost as large as the entire cost of the tax cuts,” Marc Goldwein, the group’s senior policy director, said of the 10-year cost.
The Republican Study Committee, a conservative group of roughly 150 House Republicans, said in a statement Thursday that the agreement “will further indebt future generations and remove reasonable safeguards to prevent the growth of government and the misuse of taxpayer dollars.”
But lawmakers have pointed to the rising cost of mandatory-spending programs like Medicare and Social Security as the main forces behind rising deficits over the long term. Cutting discretionary programs, including military spending, is deeply unpopular on Capitol Hill, and some lawmakers also say the 2011 law has helped slow discretionary spending.
“When they talk about $320 billion over two years increase, that’s against the sequestration levels. That’s ancient history,” said Rep. John Yarmuth (D., Ky.), the chairman of the House Budget Committee. “We’re at the same place we are on discretionary spending as we were 10 years ago.”
Some spending limits will remain in place. The agreement extends limits on some mandatory spending programs, including Medicare, beyond fiscal year 2027 to help achieve roughly $77 billion in future savings to partially offset the costs of the current deal. That is less than the $150 billion in cuts the Trump administration had sought during the talks.
Sen. James Lankford (R., Okla.), a member of the chamber’s appropriations committee, said that the Budget Control Act didn’t achieve hoped-for deficit reductions.
“It did reduce spending, and it did reduce the rate of spending. We would have a much higher rate of spending right now if it weren’t for that, so it wasn’t a total failure, but it certainly didn’t accomplish what it set out to accomplish,” he said.
The Trump administration had explored extending the limits in the 2011 law as part of the negotiations. But Democrats have celebrated their termination as a key victory in the talks, opening the door for liberal lawmakers concerned about increases in military spending to support the deal.
“We do feel like our initial push was heard and reflected in this deal in terms of reversing decades of austerity spending,” said Rep. Pramila Jayapal (D., Wash.), the co-chair of the Congressional Progressive Caucus.