Federal Deficit Projected to Exceed $1 Trillion By Late September

April 10, 2019 by Dan McCue

The federal budget deficit for the fiscal year to date is $691 billion and will exceed $1 trillion by the time the current budget year ends in September, the Treasury Department said Wednesday.

In its monthly report on the government’s finances, the department said the deficit for March was $146.9 billion, which caused the annual debt to rise 15 percent for the first half of the budget year, compared to the same period in 2018.

Much of the blame for the rise in the deficit can be attributed to the Republican tax cut bill signed into law by President Donald Trump in December 2017.

Although tax receipts ran slightly higher than a year ago, the $10 billion bump came nowhere near keeping pace with the nearly $100 billion increase in government expenditures that has occurred this year.

Representative Ben McAdams, D-Utah, who on Tuesday introduced a Balanced Budget Amendment for consideration in the House, expressed great concern over Wednesday’s Treasury report.

“The President’s fiscal year 2020 budget would add more than $10 trillion to the debt, when accounting gimmicks are removed, according to nonpartisan budget experts,” said McAdams, who is co-chair of the House Blue Dog Coalition Task Force on Fiscal Responsibility and Government Reform.

“Democrats and Republicans continue to vote for policies that increase our future debt burden, with no offsets. This is a bipartisan problem in both the legislative and executive branches, and it must end,” McAdams said.

The congressman’s Balanced Budget legislation is cosponsored by 11 other members of the coalition of fiscally-responsible Democrats.

Senator Mike Enzi, R-Wyo, chairman of the Senate Budget Committee, recently expressed concerns similar to those of McAdams.

“By constantly ignoring the increasingly dire fiscal straights that our country is in, hard decisions today will be made even tougher tomorrow,” Enzi said. “It is time to chart a more sustainable fiscal path to strengthen America’s future.”

The Treasury Department’s deficit forecast for the end of the fiscal year was decidedly grimmer than the already pessimistic view held by the Congressional Budget Office.

In projections released on January 28, the budget office said it expected the government to spend about $4.4 trillion this year, and to take in about $3.5 trillion.

The CBO expected the 2019 fiscal year to close with a deficit of $897 billion and suggested the deficit would likely stay below $1 trillion until at least 2022.

The budget office went on to say that over the next decade, deficits would likely fluctuate between 4.1 percent and 4.7 percent of the value of the nation’s gross domestic product, well above the average over the past 50 years.

In a statement to Congress when the CBO’s numbers were released, the office’s director, Keith Hall, said the nation’s debt could equal 93 percent of its gross domestic product by 2029, and about 150 percent of GDP by 2049.

“Even at its highest point ever, just after World War II, debt was far less than that: 106 percent of GDP,” Hall said.

If those predictions came to pass, Hall said, the consequences would be catastrophic.

“First, as interest rates continued to rise toward levels more typical than today’s, federal spending on interest payments would increase—surpassing the entire amount of defense spending by 2025,” he said.

“Second, because federal borrowing reduces national saving over time, the nation’s capital stock ultimately would be smaller, and productivity and total wages would be lower, than would be the case if debt was smaller,” Hall continued.

In addition, lawmakers would have less flexibility than otherwise to use tax and spending policies to respond to unexpected challenges, and finally, the likelihood of a fiscal crisis in the United States would increase, Hall said.

Economy

Blue Dogs Call for Bipartisan Infrastructure Bill to Expand Broadband Internet Access Infrastructure
Blue Dogs Call for Bipartisan Infrastructure Bill to Expand Broadband Internet Access
May 21, 2019
by Dan McCue

Representatives Joe Cunningham, D-S.C., and Mikie Sherrill, D-N.J., co-chairs of the Blue Dog Task Force on Infrastructure and Job Creation, joined with Representatives Abigail Spanberger, D-Va., and Xochitl Torres Small, D-N.M., their counterparts on the Blue Dog Task Force on Rural Opportunity, Tuesday to call for... Read More

White House to Lift Steel, Aluminum Tariffs on Canada, Mexico Trade
White House to Lift Steel, Aluminum Tariffs on Canada, Mexico
May 17, 2019
by Dan McCue

President Donald Trump revealed Friday that his administration has reached an agreement with Canada and Mexico to lift tariffs on steel and aluminum, ending a standoff that threatened to derail ratification of the president's new North American trade agreement. Speaking before the National Association of Retailers... Read More

Renewable Energy Surpasses Coal As Source of US Energy, Researchers Say Climate
Renewable Energy Surpasses Coal As Source of US Energy, Researchers Say
May 16, 2019
by Dan McCue

For the first time in history, renewable energy surpassed coal earlier this month as a source of electricity generation in the United States, the Brookings Institution reported Wednesday. The paper underlying the report attributes this remarkable development to U.S. municipalities and businesses striving to fill the... Read More

Blue Dogs to Play Key Role on House Rural Broadband Task Force Infrastructure
Blue Dogs to Play Key Role on House Rural Broadband Task Force
May 15, 2019
by Dan McCue

House Majority Whip James Clyburn, D-S.C., has launched a new House Task Force on Rural Broadband to provide coordination and leadership to end the rural-digital divide. The Task Force will work to advance solutions to ensure all Americans have access to high-speed internet by 2025. Several... Read More

China to Raise Tariffs on $60 Billion in US Goods Starting June 1 Trade
China to Raise Tariffs on $60 Billion in US Goods Starting June 1
May 13, 2019
by Dan McCue

The U.S.-China trade war escalated Monday with Beijing signaling it plans to raise tariffs on about $60 billion in U.S. goods on the heels of the United States slapping new tariffs on $200 billion in Chinese goods last week. Some 2,493 goods will see levies raised... Read More

US-China Trade Talks Break Up With No Deal In Sight In The News
US-China Trade Talks Break Up With No Deal In Sight
May 10, 2019
by Dan McCue

High stakes trade talks between the United States and China ended Friday with no agreement in sight and mixed signals from the White House in regard to where things stand. In a pair of tweets sent shortly before the markets closed Friday, President Donald Trump said... Read More

Straight From The Well
scroll top