U.S. annual budget deficit to surpass 1 trln USD by 2020

WASHINGTON, April 9 (Xinhua) -- The U.S. annual budget deficit will exceed 1 trillion dollars by 2020, as tax cuts and spending increases signed by President Donald Trump strain the country's finance, the nonpartisan Congressional Budget Office (CBO) said on Monday.

The budget deficit will grow to 804 billion dollars this fiscal year, which ends on Sept. 30, up from 665 billion dollars in fiscal 2017, according to the CBO's forecast. The gap between spending and revenues will balloon over 1 trillion dollars in fiscal 2020 and keep expanding for years.

Debt held by the public, which has doubled in the past 10 years as a percentage of gross domestic product (GDP), will approach 100 percent of GDP by 2028. "That amount is far greater than the debt in any year since just after World War II," the CBO said.

The Republican-led tax cuts deal, which was signed into law by Trump in last December, will cut taxes by 1.5 trillion dollars over 10 years. Moreover, the Trump administration plans to increase spending drastically over the next two years.

The CBO's forecast shows the fiscal stimulus will lift growth rate in short term, but do little to boost economic prospect in longer term. The CBO forecasts the growth rate will rise to 3.3 percent this year and drop to 2.4 percent in 2019.

"Such high and rising debt would have serious negative consequences for the budget and the nation," the CBO warned. Enditem