DEFICIT

will rise even higher after the coming decade because of the nation’s ageing population and higher spending on healthcare.

To put the country on a sustainable footing, Swagel said, lawmakers will have to increase taxes, cut spending or combine the two approaches.

The CBO projects that the economy will expand more slowly, from 2.3 per cent this year to 1.8 per cent on average in the next four years. The assumption reflects slower growth in consumer spending and government purchases, as well as the effect of trade policies on business investment.

It also projects the unemployment rate will remain close to its current level of 3.7 per cent through the end of 2020 and then rises to 4.6 per cent by the end of 2023.

The CBO’s estimate is the first to reflect the hard-won budget and debt deal signed into law earlier this month.

“The recent budget deal was a budget buster, and now we have further proof. Both parties took an already-unsustainable situation and made it much worse,” said Maya MacGuineas, president of the private Committee for a Responsible Federal Budget.

MacGuineas said lawmakers should ensure the legislation they enact is paid for and redouble efforts to control the growth in healthcare costs and restore the solvency of the Social Security programme. Her organisation is focused on educating the public on issues with significant fiscal policy impact.

Senior White House adviser Kellyanne Conway pivoted to the president’s desire to fund the military and other programmes when asked about the report.

“We’re always concerned about the deficit,” Conway said. “We also need to fund a lot of the projects and programmes that are important to this country.”