The Congressional Budget Office (CBO) says the US budget deficit will shrink to $559 billion in 2017.
This represents a small improvement from 2016’s $587 billion deficit.
Trump budget could increase deficit
The future of America’s budget deficit depends on what Donald Trump and Republicans in Congress prioritize in the upcoming US federal budget.
Trump has promised massive business tax cuts, middle-class tax cuts, alongside military and infrastructure spending.
That would create a huge increase in the budget deficit, though the potential increase in economic growth would reduce the overall impact when measuring by debt to GDP.
However, the Trump Administration is also looking at massive budget cuts – potentially as high as 10%. Those budget cuts would offset the deficit-increasing impacts of Trump’s spending and tax cut plans.
Though, it must be said that many governments pledge big budget savings when they take office, only to keep spending taxpayer dollars like drunken sailors once they begin governing.
With that in mind, the fact is only time will tell how big the US budget deficit will actually be.
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