WASHINGTON—The Trump administration expects the annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years, pushing the federal deficit above $1 trillion starting next year.
The revisions, which went largely unnoticed when the White House submitted its annual update to Congress last week, reflect the cost of federal spending increases agreed to earlier this year and higher interest payments.
Read: White House’s Kudlow says more pro-growth measures on horizon, sees GDP growth around 4%
The budget proposal released in February showed annual deficits totaling $7.1 trillion over 10 years. The latest revisions increase these cumulative deficits by $926 billion, to $8 trillion.
‘[President Trump] used to talk about creating such great economic growth to reduce the deficit, now you see a budget acknowledging a massive run-up due to policies he has supported.’ Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which supports debt reductionThe report highlights the challenge the Trump administration faces in reducing deficits. Administration officials have said stronger economic growth would allow recent tax cuts to generate more revenue over the long run, offsetting initial declines in receipts from rate cuts. But the latest projections show the deficit rising even though the administration projected an even stronger uptick in federal revenue.
Related: This is how Larry Kudlow defines a falling deficit
The White House budget office now estimates that the deficit will rise to nearly $1.1 trillion in the fiscal year that begins this October, or 5.1% of gross domestic product, up from $984 billion projected in February’s budget proposal. The U.S. ran a deficit of $666 billion for the fiscal year that ended Sept. 30, 2017, or 3.4% of GDP.
An expanded version of this report appears on WSJ.com.
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