U.S. Budget Deficit to Surmount Trillion-Dollar Mark Quicker Than Expected

Expected tax cuts south of the border -- along with increased spending for hurricane victims and a higher debt ceiling -- could push that country's budget deficit even higher than expected.

In fact, the deficit could be back over $1 trillion by 2020, a good deal ahead of current government projections, according to a Goldman Sachs analysis.

Under the new estimates, the deficit will hit $750 billion in 2018, $900 billion in 2019 and $1.025 trillion in 2020. The figures represent a $50-billion raise for next year and $75 billion for each of the following two years.

If accurate, they could be quite a bit higher than what the Congressional Budget Office expects.

Figures the U.S. Treasury Department unveiled last week showed that fiscal year 2017 ended with a $666-billion shortfall, which actually was lower than the CBO projection of $693 billion. However, the office expects the deficit to fall to $563 billion in 2018 then hit $689 billion and $775 billion in the following two years.

The 2017 debt represented 3.5% of gross domestic product, an increase of 0.3 percentage points from the previous year.

CBO does not see the deficit passing the $1-trillion mark until 2022, when it is estimated at $1.03 trillion, then expects it keep rising to $1.46 trillion by 2027.

Debt and deficits have been a contentious issue this year as Congress has debated the merits of the Trump administration's hopes to pass a tax reform plan that could amount to $1.5 trillion in relief. White House officials insist that the provisions to lower corporate and individual rates would pay for themselves through increased economic growth.

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