U.S. Budget Deficit Swells, Adding Wrinkle to G.O.P. Push for Tax Cut

Mick Mulvaney, the White House budget director, said that the widening deficit should serve as a “smoke alarm” to Washington and that “smart spending restraint,” along with a rewrite of the tax code and a reduction of red tape, is needed to get the economy growing faster.

The Trump administration earlier this year produced a budget proposal that included draconian cuts to agencies that it said would yield a small surplus after 10 years.

However, lawmakers from both parties dismissed most of the proposals, and the Congressional Budget Office found that the administration’s economic growth projections were overly optimistic. It projected that, under the plan, the budget deficit would amount to $720 billion, or 2.6 percent of gross domestic product, in 2027. The Congressional Budget Office said in January that it projects the federal debt will grow by $10 trillion over the next decade.

This year, spending on so-called entitlement programs such as Social Security, Medicare and Medicaid all grew, as did expenses incurred by the Federal Emergency Management Agency, which has faced heavy costs associated with hurricane relief efforts.

Democrats have been unified in their opposition to the budget and tax framework that Republicans have been drafting. They warn that rising deficits will slow economic growth and that, in turn, Republicans will look to cut safety net and other programs Democrats support.

“With the deficit as large and growing as quickly as it is, Republicans pursuing a reckless plan that would blow a huge hole in the deficit and put Medicare and Medicaid at risk is the height of irresponsibility,” said Senator Chuck Schumer of New York, the top Senate Democrat. “Instead, Republicans should work with Democrats on tax reform that is deficit neutral and focused on the middle class.”

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Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, said on Friday that it was startling how Republicans had given up caring about deficits now that they finally had the power to curb government spending.

“The contrast between the growing deficit, which is back into troubling territory, with the blatant disregard for policies that are going to increase the debt is stunning and definitely bodes poorly for the economy,” she said.

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