Report shows deficit to exceed $1 trillion next year

WASHINGTON (AP) — The Congressional Budget Office is upping its projections for this year’s federal deficit by $63 billion and increasing its forecast for deficits over the next decade by $809 billion.

Deficits exceeding $1 trillion will kick in beginning next year and will average about $1.2 trillion annually over the coming decade.

The office says the higher deficit projections stem mostly from recently enacted legislation that lifted the nation’s debt limit and reversed scheduled 10% cuts to defense and nondefense programs.

The higher projections come even as the CBO reduced its projections for interest rates, which lowers borrowing costs, and as it raised projections for economic growth in the near term.

“The nation’s fiscal outlook is challenging. Federal debt, which is already high by historical standards, is on an unsustainable course,” said CBO Director Phillip Swagel.

To put the country on sustainable footing, Swagel said lawmakers will have to make significant changes to tax and spending policies.