U.S. deficits to jump $248 billion over next two years due to tax shortfall
EghtesadOnline: The budget deficit for President Donald Trump's first two years in office will be nearly $250 billion higher than initially estimated due to a shortfall in tax collections and a mistake in projecting military healthcare costs, budget chief Mick Mulvaney reported on Friday.
In a mid-year update to Congress, Mulvaney, director of the Office of Management and Budget, revised the estimates supplied in late May when the Trump administration submitted its first spending plan.
Since then, Mulvaney said, the deficit projected for the current fiscal year has increased by $99 billion, or 16.4 percent, to $702 billion. For 2018, the deficit will be $149 billion more than first expected, increasing by 33 percent to $589 billion, Reuters reported.
The figures come as the administration is facing widespread doubts among economists and analysts that it can erase government deficits largely by boosting economic growth and changing laws like the Affordable Care Act. ACA reform is facing a difficult path in Congress, and the Congressional Budget Office on Thursday said the administration's growth and deficit reduction plans were optimistic.
The letter from Mulvaney said the bulk of the problem this year and next stems from lower-than-expected tax collections.
Individual and corporate income taxes and other collections for this year are expected to be $116 billion less than the administration anticipated in May. Tax receipts in 2018 are expected to be $140 billion less than initially estimated.
Spending in 2017 will be $17 billion less than expected -- and would have been even lower if not for the use of "erroneous outlay rates" used in estimating costs of health programs for the U.S. military, Mulvaney said in a letter to House of Representatives Speaker Paul Ryan.
Costs for the defense health program will be $19 billion higher in 2017 and $9 billion higher in 2018 than initially expected. Overall spending in 2018 will rise by $10 billion Mulvaney said.
The estimates are based on existing law and do not include any proposed changes to health, welfare or other programs.