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Report Shows US Deficit to Exceed $1 Trillion Next Year

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America's debt is growing to levels not seen since World War II. 

The annual deficit for fiscal 2019 had been projected to reach $896 billion. But according to revised numbers put out by the non-partisan Congressional Budget Office (CBO), it will now reach $960 billion.

"The nation's fiscal outlook is challenging," said Phillip Swagel, director of the CBO. "Federal debt, which is already high by historical standards, is on an unsustainable course."

Next year's deficit is expected top $1 trillion. It was previously projected to be $892 billion.

In the next decade, the government is forecast to add $12.2 trillion in deficits.

The CBO says a recent bipartisan agreement to avoid a government default is partially to blame. That agreement lifted caps on discretionary spending over the next two years and boost deficits by $1.7 trillion over the coming decade. Increased spending on disaster relief and border security would add $255 billion. Downward revisions to the forecast for interest rates will help the picture, trimming $1.4 trillion

Swagel said the federal debt will rise even higher after the coming decade because of the nation's aging population and higher spending on health care.

To put the country on a sustainable footing, Swagel said, lawmakers will have to increase taxes, cut spending or combine the two approaches.

The CBO projects that the economy will expand more slowly, from 2.3% this year to 1.8% on average in the next four years. The assumption reflects slower growth in consumer spending and government purchases, as well as the effect of trade policies on business investment.

It also projects the unemployment rate will remain close to its current level of 3.7% through the end of 2020 and then rises to 4.6% by the end of 2023.

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