Quantcast
Connect with us

US budget deficit to shrink again this year

Published

on

Money (AFP)

The US budget deficit is expected to shrink in the current fiscal year but climb after 2017 as spending mounts on health and retirement benefits, a government agency said Monday.

The Congressional Budget Office, the independent agency that provides economic and budgetary analysis to Congress, projected the deficit in fiscal 2015, which ends September 30, would total $468 billion, or 2.6 percent of gross domestic product, the smallest shortfall relative to GDP since 2007.

ADVERTISEMENT

In 2014, the federal government deficit had hit its lowest level in six years at $483 billion, falling below 3.0 percent of GDP for the first time since 2007.

The deficits have been shrinking as the economy pulls out of the deep 2008-2009 recession, supported by trillions of dollars of public aid and sharp government spending cuts. Gross domestic product increased a robust five percent in the third quarter, and although that pace was expected to moderate, the US economy remains a relative bright spot in the slowing global economy.

The positive deficit news came as President Barack Obama, in the final two years of his second term, faces for the first time a Congress controlled by opposition Republicans and a continuation, if not escalation, of fierce budget battles.

Obama’s Democratic Party sees government spending as an engine of growth, while Republicans want to shrink the government and slash taxes to spur activity.

In his State of the Union speech last week, Obama called for more spending on infrastructure, education and tax credits to keep the economy on a solid growth track, laying down a direct challenge to Republicans.

ADVERTISEMENT

Whoever wins the 2016 presidential elections will face a steadily growing deficit from 2017 through 2025, to $1.1 trillion, or 4.0 percent of GDP, according to the CBO’s 10-year budget and economic outlook report.

The nonpartisan CBO pointed out that its estimates are based on the assumption that current laws governing spending and taxation will remain broadly unchanged.

The reason the deficits would swell is in large part due to the increased spending on social safety-net programs that eclipses the economy’s growth pace, the CBO said. The government will have to spend more on health care insurance, reflecting the “Obamacare” reform that Republicans vow to roll back.

ADVERTISEMENT

The tidal wave of aging baby boomers hitting retirement also will lift spending on social security benefits.

The CBO predicted that federal government debt will rise to 74 percent of economic output by September 30, its highest level since 1950.

ADVERTISEMENT

In a bright note, revenues were projected to rise “significantly” by 2016 on the back of the ongoing expansion in the economy and the expiration of several tax breaks.

The economy was poised for “a solid pace” of growth in 2015 and in the next few years as consumer spending, business investment and home buying pick up, the agency said.

Year-over-year, GDP growth was estimated at 3.0 percent at the end of 2015 and 2016, slowing to 2.5 percent in 2017.

ADVERTISEMENT


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

CNN

‘The last chapter in The Godfather’: Watergate prosecutor tears into Trump’s ‘continuing coverup’ of his associates’ Russia misdeeds

Published

on

On CNN Wednesday, former Watergate assistant special prosecutor Nick Akerman tore into outgoing President Donald Trump for his pardon of ex-National Security Adviser Michael Flynn — and warned that a larger coverup is looming.

"I think you have to look at the big picture here," said Akerman. "The big picture is that this is part of the continuing coverup of Donald Trump's efforts to conceal what happened between his campaign in 2016 with the Russian government. It started with Jim Comey, his firing because he refused to basically give an oath of loyalty to Donald Trump. It continued when Robert Mueller was appointed, the continuing threats of firing Mueller and his staff. It continued with Roger Stone who was — his sentence was commuted."

Continue Reading

Breaking Banner

Conservative Charlie Sykes tells Trump if he wants a pardon — he’ll have to admit he’s guilty first

Published

on

Editor and creator of The Bulwark, Charlie Sykes, told MSNBC's Joy Reid that the most "Trumpy" of things President Donald Trump could do is pardon himself ahead of leaving office in January.

After the president pardoned ret. Lt. Gen. Michael Flynn, it sparked new anticipation on how Trump will protect himself from prosecution after leaving office. Trump was alleged to have committed at least ten acts of obstruction of justice by special counsel Robert Mueller. In that case, the Justice Department followed the internal rule that sitting presidents could not be indicted. Then, it stands to reason that the Justice Department would also follow a 1974 memo from the same Office of Legal Counsel that said a president could not pardon himself.

Continue Reading
 

Breaking Banner

‘It’s pathetic’: John Avlon slams Trump’s ‘delusional’ fantasy that he’s winning by ‘a lot’

Published

on

On CNN Wednesday, fact-checked John Avlon tore into President Donald Trump for his "delusional" claim that he's the real winner of the election.

"Let's not normalize that lie, because it is delusional," said Avlon. "It's the political equivalent of someone standing outside and saying that the sky is green, that the moon is made out of cheese and they're Napoleon. It's pathetic. It shows a fundamental disrespect for fact and reality, and frankly, his supporters as well. It's a symptom of an unwell person."

"We should not normalize it because it's just Trump lying trying to overturn the election as he wants to do. No, he's delusional," added Avlon. "People who follow him are being sucked into a vortex by someone who is struggling with his own soul."

Continue Reading