Treasury: U.S. federal borrowing will nearly double this year, to almost $1 trillion, due to the 'fiscal outlook'
While most of Washington was fixated on the classified memo from House Intelligence Chairman Devin Nunes (R-Calif.) last week, the Treasury Department said that it expects to borrow $955 billion in fiscal 2018, an 84 percent jump over fiscal 2017. The Treasury Department mainly attributed this near-doubling of government borrowing to the "fiscal outlook," The Washington Post notes, but the Congressional Budget Office said last week that the tax overhaul Republicans passed in December will lower tax receipts by $10 billion to $15 billion a month this year. The tax law will add at least $1 trillion to the national debt over 10 years, congressional analysts forecast, and that accounts for economic growth.
"We're addicted to debt," says Marc Goldwein at the Committee for a Responsible Federal Budget, blaming both Republicans and Democrats for the problem. Treasury predicts the U.S. will borrow more than $1 trillion in 2019 and more than $1.1 trillion in 2020, and this year's $955 billion is already the biggest jump in borrowing, as a share of GDP, outside of a recession year since Ronald Reagan's presidency, former Treasury adviser Ernie Tedeschi tells the Post. The U.S. borrowed $1.79 billion in 2009, during the Great Recession, and $1.1 trillion in 2012, but borrowing has been significantly below $1 trillion since 2013.
President Trump and Congress have an expensive list of things they want to spend money on this year, but the uptick in borrowing may come with a cost. "Some of my Wall Street clients are starting to talk recession in 2019 because of these issues," Peter Davis, a former tax economist in Congress, tells the Post. "Fiscal policy is just out of control." But the tax overhaul is paying some dividends — just ask House Speaker Paul Ryan. Peter Weber
Paul Ryan deleted this tweet. I think I know why (and why we may see it in a Democratic attack ad)... pic.twitter.com/4Kg2QMlofE
— Jennifer Bendery (@jbendery) February 3, 2018
"Millennials, you just had $1.5 trillion stolen from you," MSNBC's Joe Scarborough said on Morning Joe on Monday, referring to the $1.5 trillion the Republican tax plan is predicted to add to the federal deficit, and thus the national debt, in the next decade. "Past Congresses have stolen $20 trillion from you," he continued, citing the current national debt total, "and over the next ten years, they're going to steal another $10 trillion from you. And they're going to die, and then you're going to be left holding the bill."
Scarborough went on to level charges of irresponsibility at both parties, criticizing both for their role in growing the national debt to its present size. Particularly if the GOP tax bill weakens the economy, he mused, it will "turn a lot of people into socialists." Watch his comments in context below. Bonnie Kristian