Economy

The White House Has Sharply Increased Their Deficit Projection

Written by SK Ashby

We all knew this was coming, but here it is.

The White House Office of Management and Budget (OMB) previously projected that the federal deficit would reach $984 billion in fiscal 2019, but they've quietly revised that number upward by an additional $100 billion for a total of nearly $1.1 trillion. And this is going to happen very soon as the next fiscal year begins on October 1st.

From the Wall Street Journal:

The revisions, which went largely unnoticed when the White House submitted its annual update to Congress last week, reflect the cost of federal spending increases agreed to earlier this year and higher interest payments. [...]

The White House budget office now estimates that the deficit will rise to nearly $1.1 trillion in the fiscal year that begins this October, or 5.1% of gross domestic product, up from $984 billion projected in February’s budget proposal. The U.S. ran a deficit of $666 billion for the fiscal year that ended Sept. 30, 2017, or 3.4% of GDP.

Why is there such a significant difference between their projections from earlier this year and their projections from last week?

As it turns out, magic asterisks only work before you pass a tax cut, not after. The GOP's tax cuts haven't lit the economy on fire and haven't led to dramatically higher federal revenue or at least not anywhere near enough to cover the cost of Republican fiscal recklessness.

The tax cut didn't pay for itself and it's never going to. It's not going to work this year or 15 years from now when another generation of Republicans promise it will all trickle down.