U.S. annual budget deficit to surpass 1 trln United States dollars by 2020

Donald Trump speaks during a campaign event in Hartford Conn. in April 2016

Donald Trump speaks during a campaign event in Hartford Conn. in April 2016

According to the analysis of the Congressional Budget Office, the annual US budget deficit will rise above $1 trillion in 2020, two years earlier than previously forecast. By then, debt held by the public will nearly match the size of the nation's economy, reaching 96 percent of gross domestic product, a higher level than any point since just after World War II and well past the level that economists say could court a crisis. Those four years of trillion-dollar deficits happened during and immediately after the so-called Great Recession, which cratered tax revenues and saw increased government spending on a variety of mostly ill-conceived and generally wasteful efforts to stimulate the economy or bail out certain industries. But getting to that level requires Congress to enact more than $1 trillion in spending cuts over the next decade-something that seems well beyond the realm of fantasy and nearing the border of complete political impossibility. The Trump tax cuts were designed with permanent cuts for corporations and heirs of large estates, coupled with temporary, expiring tax cuts for the middle class.

Today, the Congressional Budget Office (CBO) released its annual Budget and Economic Outlook for 2018 to 2028.

According to the CBO, the $1.3 trillion federal spending package as well as tax cuts are anticipated to push economic growth, pushing discretionary spending from businesses and households in the next two years.

The news came on Monday as tax cuts and federal spending hikes took effect.

No matter what the economic indicators imply, the Trump administration doesn't hesitate from making wildly exaggerated claims, as the White House spokesperson Raj Shah said on Fox News that the Trump budget "has over $3 trillion dollars in deficit reduction, which is the largest deficit reduction of a budget in terms of a 10-year outlay that we've ever seen". "In particular, the likelihood of a fiscal crisis in the United States would increase". "This week, House Republicans will move forward with their plan to pay for this tax giveaway: A budget procedure that would gut Medicare, Medicaid, Social Security, and investments in our nation's economy and future growth", he said. The country's cumulative deficit will balloon to $11.7 trillion from 2018 to 2027, $1.6 trillion higher than previous estimates.

"That is unacceptable", said Sen.

Republicans are unlikely to pass even a nonbinding budget blueprint, instead opting to take a pause in the heat of election season.

Some economists warn that a rising federal deficit and overall national debt will cause interest rates to rise.

The short-term boost also comes at a significant price: The government will run a deficit of $804 billion this year, which is much bigger than last year's $665 billion tally.

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