Trump tax cuts carry a huge price tag

WASHINGTON — The tax cuts championed by President Trump are pushing the nation toward an unprecedented level of debt, heightening the risk for another financial crisis, according to the nonpartisan Congressional Budget Office.

The budget office’s annual look at the government’s longterm financial outlook paints a grim picture, projecting soaring deficits in the coming years, with debt ultimately peaking at more than 152 percent of the nation’s gross domestic product.

“The prospect of large and growing debt poses substantial risks for the nation and presents policy makers with significant challenges,” Keith Hall, director of the budget office, said in a statement.

The biggest problem in the coming decade stems from last year’s tax cut. It is estimated to increase the deficit by more than $2.3 trillion over that period.

The spiraling price of providing subsidized health care and social security for the nation’s aging population adds to the problem, the budget office said.

The federal debt already stands at the highest level relative to the size of the economy that it has been since the aftermath of World War II. At that point, the nation was deep in the red from the war effort and the public works projects implemented in response to the Depression.

More recently, America plunged back into a high level of debt to combat the Great Recession, when Congress passed major spending increases to pull the nation out of it.

But Washington not only failed to wipe out the red ink when the economy rebounded, after a few years of progress in President Barack Obama’s second term, the government under Trump has reversed course, moving toward even higher debt levels.

The national debt is projected to surge upward, bringing the nation into uncharted territory unless the government adopts far-reaching policy shifts that could include deep cuts in spending on entitlement programs or significant tax increases.

The report lays out precisely what it would cost to keep the long-term debt from soaring.

To bring the red ink down to the historical average level, taxes would need to increase 17 percent — $2,000 per household — or government spending would need to be cut by 15 percent. Over the past 50 years, federal debt has average about 41 percent of the gross domestic product.

Just keeping the federal debt at its current, historically high level, would require increasing taxes by 11 percent — $1,300 per household — or cutting spending by 10 percent.

The heavy level of debt is already taking a toll on taxpayers. The report projects that government borrowing costs are on track to exceed the amount the government spends each year on social security.