CBO: 2018 budget deficit to reach $804B

The new estimate comes after several months marked by substantial policy changes, including a $1.5 trillion tax cut plan and a $1.3 trillion spending bill signed by President Donald Trump.

Between the lines: Republicans have spent almost a decade campaigning on fiscal restraint.

Numerous new major tax cuts and huge spending commitments introduced by the Donald Trump administration since he took office 18 months will really begin to be felt in terms of treasury coffers by the end of his first term.

Senate Democratic Leader Chuck Schumer said the lower revenues and higher deficits resulting from the tax overhaul will prompt Republicans to call for cuts to social safety net programs such as the Social Security retirement program and the Medicare health insurance program for the elderly.

Altogether, deficits over the decade will be $1.6 trillion higher than previously projected by CBO and by 2028, debt held by the public would total almost 100 percent of GDP; the most since post-World War II.

The CBO said the tax cuts and the additional spending will boost consumer demand, supercharging the economy.

BJP's Dalit MPs have exposed 'anti-Dalit' Modi govt: Congress
A Dalit MP from Uttar Pradesh has written to Prime Minister Narendra Modi , alleging that the Centre was ignoring Dalits. The BJP and its senior leaders were virtually ostracized from prevalent political scenario.

"We expect interest rates to accelerate faster", said CBO's Hall. First, the rising possibility of a serious trade war with China, which could cause a tremendous amount of damage to our export sector, trigger a higher rate of inflation and a proportionate increase in interest rates, which would put the brakes on growth.

The federal deficit - the gap between how much the government takes in and how much it spends - will hit $804 billion in fiscal 2018, up 21 percent from 2017, the CBO said. But for shifts in timing of payments, the deficit would have been even worse, at $848 billion, which would have been a one-year surge of 28 percent.

The analysis "confirms that major damage was done" by the new tax law and the spending bill, said Michael Peterson, head of the nonpartisan Peter G. Peterson Foundation. The Trump tax cuts were designed with permanent cuts for corporations and heirs of large estates, coupled with temporary, expiring tax cuts for the middle class. In a decade, the red ink is expected to reach $1.5 trillion.

This year, lawmakers approved a two-year budget deal that raised strict caps on military and domestic spending by about $300 billion.

But running something much closer to an overall balanced budget sooner rather than later is needed if the aim is to get the debt-to-GDP ratio heading back down towards historic norms over the coming decades. All it will take are sizable tax increases.

His formal budget proposals have been far harsher, but the Republican-led Congress has pushed against his proposed cutbacks due to their political unpopularity and the need to attract Democratic votes in order to pass any plan.