The US deficit is projected to surpass $1tn in 2019, the largest it’s been outside of the four-year period following the Great Recession.
The new record, previously expected but made official in the White House Office of Management and Budget’s newly released mid-year review, subtitled "Promises Kept, Taxpayers First," is in direct contrast with Donald Trump’s 2016 campaign promise to wipe out the deficit.
The then-candidate also promised to heavily scale back the federal debt, which has now exceeded $22tn. His own advisers knew that both promises were impossible, and they morphed into smaller numbers along the trail.
Now, while running the country while simultaneously running for president, the president simple maintains that the economy is “perhaps the greatest economy we've had in the history of our country." This claim is often cited in conjunction with the Trump administration’s many tax cuts for the wealthy.
“The years when we increased deficits are years when the economy is slowing down,” Gary Cohn, a previous director of the National Economic Council, told CNBC last year.
But Republicans have maintained that the 2017 tax reform law, and many losses to federal regulations to support economic equality, would stimulate the economy.
Last week, Larry Kudlow, the top White House economic adviser, said we have already “virtually paid for” the tax cuts. He also claimed last June that the deficit “is coming down rapidly.” It was not.
Still, the deficit increase wasn’t unexpected. Deficits rose after tax cuts Ronald Reagan and George W. Bush, both Republicans. Economic forecasters on both sides projected the pattern would repeat with the Trump iteration. The new estimate confirms that they were right.