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

Kudlow Pushes Back On Recession, Says U.S.-China Calls Positive Economy
Kudlow Pushes Back On Recession, Says U.S.-China Calls Positive

WASHINGTON — Larry Kudlow pushed back Sunday on the notion that the U.S. economy is headed toward a recession, and said recent phone calls between U.S. and Chinese trade negotiators had produced more “positive news.” Kudlow, the White House National Economic Council director, and Peter Navarro,... Read More

Trump Calls Greenland ‘Interesting’ As Denmark Rules Out A Sale Foreign Affairs
Trump Calls Greenland ‘Interesting’ As Denmark Rules Out A Sale

WASHINGTON — President Donald Trump said buying Greenland would be “a large real estate deal” that could ease a financial burden on Denmark, which administers the island, but hours earlier its Prime Minister Mette Frederiksen ruled out any sale to the U.S. “Strategically it’s interesting and... Read More

Mulling Presidential Run, Mark Sanford Says Government’s Precarious Finances Are Nation’s Biggest Threat Political News
Mulling Presidential Run, Mark Sanford Says Government’s Precarious Finances Are Nation’s Biggest Threat
August 16, 2019
by Dan McCue

WASHINGTON - Back home in South Carolina after a mid-week trip to New Hampshire, former Rep. Mark Sanford said Friday he was pleased with how things went in the Granite State and his decision on whether to mount a primary challenge against President Trump will be... Read More

Katko, Brindisi Launch Bipartisan Effort to Address Lake Ontario Woes
Katko, Brindisi Launch Bipartisan Effort to Address Lake Ontario Woes
August 15, 2019
by Dan McCue

WASHINGTON - Representatives John Katko and Anthony Brindisi have launched a bipartisan effort to hold the international commission that manages outflows from Lake Ontario accountable for recent historic flooding. Katko, a Republican, and Brindisi, a Democrat, have gotten the Government Accountability Office, a nonpartisan group that... Read More

As Recession Fears Grow, Trump Delays Tariffs On Some Chinese Goods Economy
As Recession Fears Grow, Trump Delays Tariffs On Some Chinese Goods
August 13, 2019
by Dan McCue

WASHINGTON -- After days of growing indications the U.S. may lapse into a recession before the 2020 election, the Trump administration announced Tuesday that it is delaying some of the additional tariffs it planned to impose on Chinese goods on Sept. 1. The announcement, which was... Read More

Houlahan, Balderson Lead Bipartisan Effort to Bolster Grants To Spark Small Business Innovation Business
Houlahan, Balderson Lead Bipartisan Effort to Bolster Grants To Spark Small Business Innovation
August 6, 2019
by Sean Trambley

Freshman Representative Chrissy Houlahan, D-Penn., was joined by Representative Troy Balderson, R-Ohio, to introduce bipartisan and bicameral legislation to enhance commercialization services for federally funded research and development.  Introduced in the House on July 18, H.R. 3839, the Research Advancing to Market Production (RAMP) for Innovators... Read More

Straight From The Well
scroll top