U.S. deficit exceptionally high for period of strong economy

As the government borrows to plug the hole between revenue and spending — the deficit — it adds to the national debt by borrowing money. Lawmakers from both parties have said this saddles future generations of Americans with huge fiscal burdens, and it could also make it extremely difficult to respond to an unforeseen shock, such as a financial crisis, a natural disaster or a terrorist attack.

And when the U.S. government borrows money, it often must turn to countries such as China for funding, at times complicating already tense relationships. WASHINGTON — The U.S. budget deficit is reaching levels that are abnormally high for a robust economy, and lawmakers from both parties are proposing ideas that would make the deficit swell even further.

The government spent

$895 billion more than it brought in from taxes and other revenue sources during the past 11 months, the Congressional Budget

Office said last week, a 33 percent increase from one year before.

Typically, the deficit shrinks during strong economic times, as the need for costly government support wanes and tax revenue rises. In 2000, the last time the unemployment rate was at its current level of 3.9 percent, the government ran a surplus, meaning tax revenue eclipsed all spending.

The dynamic is much different now. programs,’” he said.

Corporate tax receipts Among the Republicans, fell 30 percent in the past the loudest voices recently 11 months, the CBO said, prehave come from outside Concipitated by the large reducgress. tion in rates from the mas“With a booming econ- sive tax overhaul passed by omy, full employment, a Congress last year. Spending soaring stock market and levels have risen sharply as a record asset values, we result of a bipartisan agree- should be shrinking the defi- ment to shed budget caps cit, not growing it,” Mitt Romput in place to maintain fisney, a Republican and Sencal discipline and pour more ate candidate in Utah, wrote money into both military and on his campaign website. He domestic programs. said other conservatives have

“It’s not just irresponsi- largely been “silent” on the ble, it’s wildly irresponsi- issue since President Donald ble,” said retired senator Trump took office.

Kent Conrad, D-N.D., who Yet there are signs the boradded that lawmakers are rowing binge has only begun. pushing the deficit higher Leading House Republi- because of political expe- cans proposed an additional diency. $646 billion in tax cuts last

“If you are seeking elec- week — a number that could tive office, the hardest thing grow to roughly $2 trillion in the world is to say, ‘I’m over a decade — and a grow- going to raise your taxes or ing number of prominent cut spending on popular Democrats have proposed expanding access to government-sponsored health care, which could add trillions more.

A number of congressional Republicans have defended the tax law’s impact on the debt, saying they believe cutting taxes will ultimately lead to so much economic growth that it more than compensates for the loss in revenue.

“I think it’s a very modest investment in a dramatically better economy where, a lot of people in our country who really lost hope in finding a good-paying job, now have hope and are actively seeking those jobs,” House Ways and Means Committee Chairman Kevin Brady, R-Texas, told reporters last week. “It’s an investment that is paying off.”

The government has $21.5 trillion in debt, up from $12.8 trillion in 2010, when a fiscal commission led by Alan Simpson and Erskine Bowles sought ways to reduce the deficit.

And the cost of maintaining this debt is snowballing, driven higher not just by spending but also by rising interest rates.

The government is projected to spend $390 billion on interest payments alone next year, an amount almost equivalent to its entire $401 billion budget for Medicaid, according to the CBO.

Congressional Republicans spent much of the Obama administration decrying deficits and forcing restrictions on spending. They largely abandoned those sentiments when Trump took office.

Taken together, the tax cuts and new spending levels are expected to add more than $5 trillion to the debt over the next decade, according to the Committee for a Responsible Federal Budget, a nonpartisan organization that advocates for budget discipline.