The Republican overhaul of America's tax code and increased government spending are projected to boost economic growth to 3.3 percent this year but push the national debt to nearly the same size as gross domestic product by 2028, according to government data released Monday.
The Congressional Budget Office forecast that the new tax law will generate an average of 0.7 percent growth over the decade and create 1.1 million jobs. It also predicted the two-year federal spending deal would increase GDP by 0.3 percent this year and 0.6 percent in 2019. However, larger budget deficits would crowd out private investment in later years, dampening economic growth.
As a result, the CBO estimated the cumulative deficit over the next decade will be $1.6 trillion larger than previously projected. By 2028, the national debt would total 96 percent of GDP.
"Such high and rising debt would have serious negative consequences for the budget and for the nation," the CBO report said.
Republicans have been fending off criticism from fiscal hawks for passing a $1.5 trillion tax cut late last year and following it up with a $1.3 trillion government spending deal with Democrats signed last month. The CBO estimates that annual deficits will reach $1 trillion in 2020, buttressing similar warnings from private forecasters.
"We now are facing trillion-dollar deficits as far as the eye can see — a terrible path, made even worse by the fact that this comes amidst a strong economy and is the self-inflicted result of irresponsible policy choices," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "Hopefully it will serve as a wake-up call for our political leaders who have become frighteningly comfortable with deficit denial."
Democrats seized on the CBO analysis to attack one of the main GOP arguments for the tax cut bill.
"The CBO's latest report exposes the scam behind the rosy rhetoric from Republicans that their tax bill would pay for itself," New York's Chuck Schumer, the leading Democrat in the Senate, said in a statement.