US Deficit Racing Towards $1 Trillion as 'Fiscal Crisis' Looms

A new report warns that the US is heading for $1 trillion annual federal deficits, and the Congressional Budget Office says that's going to radically raise the nation's debt in just a decade.

The new CBO analysis projects the US will see the federal deficit rise above $1 trillion a year within two years – earlier than had been previously expected.

The news came on Monday as tax cuts and federal spending hikes took effect.

The deficits are expected to drive the national debt from $21 trillion now up to $33 trillion within 10 years.

While the deficit is on the rise, Congress doesn’t seem to be likely to cut spending.

House Republican leaders have scheduled a vote this week on a Constitutional amendment to require a balanced federal budget.  But many say it is virtually certain to fail.

In late March, President Trump signed a $1.3 trillion spending plan to fund the government through September. 

He said the only reason he signed off on the bill on "national security" grounds was because it rebuilds America's military and improves homeland security.

"I will never sign another bill like this again," said Trump. "I'm not going to do it again."

Analysts say the debt problems could get worse.

Interest rates are expected to rise in the years ahead which will make interest payments on the national debt even more expensive and could lead to cutbacks in other government spending, from social programs to the military.

CBO director Keith Hall warns that rising debt raises the chance of a fiscal crisis in the years ahead. 

"Such high and rising debt would have serious negative consequences for the budget and the nation," said Hall. "In particular, the likelihood of a fiscal crisis in the United States would increase."