WASHINGTON — The federal budget deficit is growing faster than expected as President Donald Trump’s spending and tax cut policies force the United States to borrow increasing sums of money.
The deficit — the gap between what the government takes in through taxes and other sources of revenue and what it spends — will reach $960 billion for the 2019 fiscal year, which ends Sept. 30. That gap will widen to $1 trillion for the 2020 fiscal year, the Congressional Budget Office said in updated forecasts released on Wednesday.
The updated projections show deficits rising — and damage from Trump’s tariffs mounting — faster than the office had previously predicted. In May, the budget office said it expected a deficit of $896 billion for 2019 and $892 billion for 2020.
That damage would be even higher if not for lower-than-expected interest rates, which are reducing the amount of money the government has to pay to its borrowers. Still, the 2019 deficit is projected to be 25% larger than it was in 2018, and the budget office predicts it will continue to rise every year through 2023.
By 2029, the national debt will reach its highest level as a share of the economy since the immediate aftermath of World War II.
The increasing levels of red ink stem from a steep falloff in federal revenue after Trump’s 2017 tax cuts, which lowered individual and corporate tax rates, resulting in far fewer tax dollars flowing to the Treasury Department.
The ballooning defies historic trends and underscores the degree to which Republicans in Washington — who championed fiscal responsibility under President Barack Obama — have largely abandoned that goal.
Trump has shown little inclination to prioritize deficit reduction, and has instead considered policies that would add to the debt. The president has mused in recent days about reducing the taxes that investors pay on capital gains, a move that is estimated to add $100 billion to deficits over the next decade.
The president also wants to make permanent many of the temporary individual tax cuts contained in the 2017 law, which are scheduled to expire in 2025. The budget office forecast assumes those cuts expire and tax revenues rise; if they do not, future deficit projections would be even larger.
This article originally appeared in The New York Times.