US Budget Shortfall To Swell To Record Levels In Next Decade - Congressional Budget Office

WASHINGTON (UrduPoint News / Sputnik - 21st August, 2019) Estimates of the US budget deficit for all of 2019 have swelled by $63 billion since projections just three months ago, with accumulated red-ink by the end of the decade expected to match levels at the close of World War II, the Congressional Budget Office (CBO) said in a report on Wednesday.

"CBO's estimate of the deficit for 2019 is now $63 billion more - and its projection of the cumulative deficit over the 2020-2029 period, $809 billion more - than it was in May 2019," the report said.

In absolute terms, CBO expects the United States to spend $960 billion more than the government collects in taxes and fees this year, with the annual deficit averaging $1.2 trillion between 2020 and 2029, the report said.

"As a result of those deficits, federal debt held by the public is projected to grow steadily, from 79 percent of GDP [Gross Domestic Product] in 2019 to 95 percent in 2029 - its highest level since just after World War II," the report added.

Assumptions underlying CBO estimates are sharply at odds with optimism often expressed by President Donald Trump that the US economy is capable of sustaining a growth rate of 3 percent or higher year after year.

In contrast, the CBO assumes that growth will remain below 2 percent for much of the next decade.

In recent days, Trump has floated the idea of cutting taxes amid early indications of a slowing US economy. At the same time, Trump has increased criticism of the Federal Reserve board for setting interest rates higher than other industrial nations and constraining economic growth.