Budget Deficit to Spike to $702B
The White House said Friday that worsening tax revenues would cause the budget deficit to jump to $702 billion this year. That's a $99 billion spike from what was predicted less than two months ago.
The report from the Office of Management and Budget came on the heels of a rival Congressional Budget Office analysis that scuttled White House claims that its May budget, if implemented to the letter, would balance the federal ledger within 10 years. The OMB report doesn't repeat that claim and instead provides just two years of updated projections.
The White House budget office also said the deficit for the 2018 budget year that starts on October 1 would increase by $149 billion, to $589 billion. But lawmakers are already working on spending bills that promise to boost that number even higher by adding to President Donald Trump's Pentagon proposal and ignoring many of his cuts to domestic programs.
Last year's deficit registered $585 billion.
The White House kept the report to a bare-bones minimum and cast blame on "the failed policies of the previous administration."
"The rising near-term deficits underscore the critical need to restore fiscal discipline to the nation's finances," said White House budget director Mick Mulvaney. "Our nation must make substantial changes to the policies and spending priorities of the previous administration if our citizens are to be safe and prosperous in the future."
In late May, Trump released a budget plan proposing jarring cuts to domestic programs and promising to balance the budget within a decade. But the CBO said Trump relied on rosy predictions of economic growth to promise a slight surplus in 2027.
Trump's budget left Social Security retirement benefits and Medicare alone, though House Republicans are poised next week to again propose cutting Medicare as they unveil their nonbinding budget outline.
Trump's budget predicted that the U.S. economy would soon ramp up to annual growth in gross domestic product of 3 percent; CBO's long-term projections predict annual GDP growth averaging 1.9 percent.
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