Democrats Fear Social Security, Medicare Cuts Are Coming as U.S. Deficit Outlook Balloons

President Donald Trump and Congressional Republicans' tax cuts and spending increases will have serious impacts on the U.S. deficit. The national budget deficit will now surpass $1 trillion by 2020, two years earlier than expected according to a new report out by the nonpartisan Congressional Budget Office on Monday.

The U.S. is expected to spend $804 billion more than it makes in revenue this fiscal year, up significantly from previous estimates of $563 billion last June. The country's cumulative deficit will balloon to $11.7 trillion from 2018 to 2027, $1.6 trillion higher than previous estimates. Meanwhile, total debt is projected to reach 96 percent of gross domestic product, or nearly $29 billion by 2028 — the highest total debt since WWII.

While economic growth is projected to be strong this year and next, the CBO estimates that things will slow down again. "Between 2018 and 2028, real actual output and real potential output alike are projected to expand at an average annual rate of 1.9 percent," wrote CBO director Keith Hall. President Trump has promised growth of over 3 percent, and based his economic policy on that sustained rate.

GettyImages-897241798 (1)
U.S. President Donald Trump holds up a copy of legislation he signed before before signing the tax reform bill into law in the Oval Office December 22, 2017 in Washington, DC. On Monday the Congressional Budget Office said the bill was partially responsible for a large increase in the deficit. Chip Somodevilla/Getty Images

The report comes as a hit to Republicans campaigning on tax cuts in the 2018 midterm elections, and a boon to Democrats looking to point out the hypocrisy of Republicans who once complained about President Barack Obama's spending and claimed to be deficit hawks.

"Today's CBO report underscores the reality that the Republicans' $1.5 trillion tax plan will increase our already large national debt," wrote Democratic Senator Chris Van Hollen in a statement. "President Trump has given a huge windfall to the very rich and special interests – and put it on the nation's credit card, asking working Americans to pay the bill."

Van Hollen also expressed worry that Republicans will use this news to cut into entitlement programs like Social Security. "This week, House Republicans will move forward with their plan to pay for this tax giveaway: A budget procedure that would gut Medicare, Medicaid, Social Security, and investments in our nation's economy and future growth," he said.

President Trump has spoken out against the dangers of deficit spending in the past, writing in 2012 that, "Our $17T national debt and $1T yearly budget deficits are a national security risk of the highest order," but has yet to comment on the latest report.

Our $17T national debt and $1T yearly budget deficits are a national security risk of the highest order.

— Donald J. Trump (@realDonaldTrump) November 13, 2012

"Today's CBO report confirms that major damage was done to our fiscal outlook in just the past few months. This is the first forecast to take into account the recent tax and spending legislation, and it's clear that lawmakers have added significantly more debt on top of an already unsustainable trajectory," said Michael Peterson, President and CEO of the Peterson Foundation, a nonpartisan group that focuses on America's fiscal challenges.

"This high and rising debt matters because it harms our economy, by crowding out public and private investment, reducing our fiscal flexibility, and lowering confidence and certainty. Now, during a time of low unemployment and economic expansion, we should be taking reasonable steps to put our debt on a sustainable path – but instead we are piling up trillions of bills that will harm the next generation's economic prospects and prosperity," he said.