WASHINGTON: The White House has revised the fiscal year 2019 budget deficit to a projected 1 trillion U.S. dollars, the highest since 2012, Office of Management and Budget (OMB) said in its recently released Mid-Session Review.
Without reform, trillion-dollar deficits will continue throughout the budget window, and will drive debt to more than 33 trillion dollars by 2029, the OMB report said, reports Xinhua."The trend of growing deficits can be reversed only through concerted efforts of spending restraint and restoring government to the proper size," it said.
The expanding deficit partially resulted from a 10-year 1.5-trillion-dollar tax cut rolled out in late 2017, which substantially reduced corporate and individual income tax rates, it said.
Spending has also soared as a result of increases in defense expenditures, demanded by the Republicans, and increases on health care and education, among others, sought by the Democrats, it added.
Based on the budget proposal for fiscal year 2020 that President Donald Trump sent to Congress in March, over 2.9 trillion dollars will be cut in spending, the report said, noting that deficits will fall from 4.7 percent of gross domestic product (GDP) in 2020 to 0.6 percent of GDP in 2029.
The revised 2019 deficit is 91 billion dollars lower than the 1.1 trillion deficit projected in March, largely the result of "technical revisions," it said.
The Treasury Department said on Thursday that the U.S. federal budget deficit reached 747 billion dollars in the first nine months of the fiscal year 2019, up by 23 percent from the previous year.The department then on Friday urged Congress to raise the federal debt ceiling before lawmakers leave for the August recess, warning that the department will exhaust its cash in early September, near the end of this fiscal year.