U.s. Deficit To Expand By $800 Billion More Than Previously Expected Over 10 Years, Cbo Says

WASHINGTON - America's federal deficit will expand by about $800 billion more than previously expected over 10 years, primarily because of two legislative packages approved this year, pushing the nation further into levels of debt unseen since the end of World War II, the Congressional Budget Office said Wednesday. The CBO, a nonpartisan agency, also said the impact of higher trade barriers, primarily President Donald Trump's trade war, could hurt economic growth amid widespread fears of a recession.The United States was already expected to hit about $1 trillion in annual deficits next year, an unusually high number, particularly given that deficits normally contract during sustained periods of economic growth.But that shortfall will expand by $1.9 trillion in new spending over the next decade because of a budget deal to avoid the spending cliff reached by congressional Democrats and Trump, and an emergency spending package for the crisis at the U.S.-Mexico border.Those budget increases will be partially offset by lower spending than projected because of cuts to interest rates, which, along with other changes to the CBO's forecasts, reduce the deficit by more than $1 trillion over the next decade.The new revisions reflect changes from the CBO report in May, before the budget deal or emergency aid package were passed.The CBO report is likely to intensify concerns that the United States does not have enough fiscal space to stimulate the new economy to avoid a recession - such as the payroll tax cut recently floated by the president - although many economists say those fears are overblown."Deficits are now expected to be larger than previously projected," the CBO report states.