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The US budget deficit is projected to top $1 trillion this year, its highest level since 2012

Gina Heeb   

The US budget deficit is projected to top $1 trillion this year, its highest level since 2012
This Sept. 18, 2019, photo shows the view of the U.S. Capitol building from the Washington Monument in Washington. The federal deficit for the 2019 budget year is expected to have soared to near  Dollar 1 trillion, up more than  Dollar 200 billion from last year and the largest such gap in seven years. (AP Photo/Patrick Semansky)

Associated Press

This Sept. 18, 2019, photo shows the view of the U.S. Capitol building from the Washington Monument in Washington. The federal deficit for the 2019 budget year is expected to have soared to near $1 trillion, up more than $200 billion from last year and the largest such gap in seven years. (AP Photo/Patrick Semansky)

  • The US budget deficit is projected to swell past $1 trillion in 2020, according to a new report.
  • That would be the first time it passed the $1 trillion mark since 2012, when Washington was still pursuing stimulus measures to help the nation recover from the Great Recession.
  • Such steep borrowing increases are unusual right now because solid economic growth gives policymakers more tools to reduce the debt.
  • Visit Business Insider's homepage for more stories.

The US budget deficit is projected to swell past $1 trillion in 2020, according to a new report, as the government continues to spend more than it raises despite an economy that is growing steadily.

The nonpartisan Congressional Budget Office estimated Tuesday that the budget deficit would hit $1.02 trillion in the fiscal year that began on October 1. That would be the first time it passed the $1 trillion mark since 2012, when Washington was still pursuing stimulus measures to help the nation recover from the Great Recession.

Borrowing is likely to continue to climb dramatically over the next decade, the CBO said, hitting an unprecedented $31 trillion by 2030.

Such steep borrowing increases are unusual right now because solid economic growth gives policymakers more tools to reduce the debt. Gross domestic product is expected to expand 2.2% this year, slower than targets set by President Donald Trump but a still-solid pace at this point in the expansion.

"That's a sad reflection of our nation's poor fiscal health, and it adds insult to injury that we're piling on all this debt in a growing economy," said Michael A. Peterson, the chief executive of the Peter G. Peterson Foundation, which advocates for deficit reduction. "If a policy is important enough to enact, it should be important enough to pay for."

Red ink has risen steadily under Trump, who vowed as a candidate to eliminate the national debt within eight years. On Wednesday, Trump sought to blame the Federal Reserve for borrowing costs he said impeded the ability to pay off debt. But interest rates are historically low, and economists say policy is driving the gap wider.

The deficit outlook worsened following a bipartisan spending package passed by Congress last year, which was expected to add more than $500 billion to the debt over a decade. A 2017 tax cut package has also drawn increasing backlash after budget experts concluded it has not paid for itself, a claim Republicans pushed as they advocated for the $1.5 trillion move.

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