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Trump focus on federal debt, deficit after GOP tax law caused jump

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donald trump chart debt obamaJoe
Raedle/Getty Images

  • President Donald Trump is suddenly obsessed with the growing
    federal deficit, according to a new Washington Post report.
  • Trump’s major legislative achievement — the GOP tax law — is
    a major driver of the exploding deficit.
  • The possibility Trump will actually take action to reduce the
    deficit is slim.
  • The president is still pushing deficit-busting ideas, and
    House Democrats are unlikely to get on board with any major
    deficit-focused bill.

President Donald Trump is suddenly very interested in reducing
the federal
deficit
, which is on the rise after two years of debt-adding
policies pushed by the president. 

According to a new
report from The Washington Post
, Trump has demanded that
Cabinet officials work on a way to reduce the federal deficit. He
has apparently repeatedly expressed concern over the past few
weeks regarding the growing amount of debt the federal government
is taking on.

Trump requested that the officials find a way to cut 5% from each
of their budgets, and he is looking for other ways to bring the
exploding deficit under control. 

The impetus for the concern, according to the Post, was the
Treasury Department’s report in October that showed the
federal deficit grew to $779 billion
in fiscal year 2018
(which ran from October 2017 through September 2018). That was
the highest annual budget deficit since 2012.

The new focus is a major departure from Trump’s previously
dismissive attitude toward the deficit. For instance, the Post
story confirmed an anecdote first mentioned in journalist Bob
Woodward’s book, “Fear: Trump in the White
House
.”

When former economic adviser Gary Cohn first brought the issue to
Trump’s attention, the president suggested that
the US could simply print more money
to pay off the debt and
did not appear fazed by the possibility of rising deficits.

This attitude toward the deficit was also reflected in Trump’s
major legislative pushes in his first two years in office.

A substantial contributor to the deficit is Trump’s signature
legislative achievement — the GOP tax law, which the
Congressional Budget Office (CBO) estimated will add $1.5
trillion to the deficit through 2028. 

Despite
promises that the law
would not add to the deficit, the TCJA
already helped to push the federal government’s borrowing levels
to their
highest since the depths of the financial crisis
.


us federal deficitAndy Kiersz/Business Insider

Other legislative actions undertaken during Trump’s time in
office will have an outsized effect on the deficit over the next
few years.

According to the
Committee for a Responsible Federal Budget
, $262 billion of
the 2018 fiscal year deficit — roughly one-third of the total
—  was caused by legislation passed under Trump. And $445
billion of the fiscal year 2019’s projected deficit — roughly 45%
of the total — will be caused by new measures. In total, the
group projected that new legislation will add $2.4 trillion
in new debt by 2027.

But despite Trump’s sudden interest in the debt, the Post report
makes clear that the president has no clear plan to address it.

Trump is still pushing for a variety of policies — such as
another tax cut for the middle class and a large infrastructure
package — that would add a substantial amount of debt.

But even if the president did assemble some sort of spending cuts
package, the newly divided Congress would be unlikely to pass any
sort of major cuts. The one item that is consistently floated as
an area where Trump and House Democrats could possibly work
together —
infrastructure
— would likely add even more to the deficit.

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