The latest Congressional Budget Office forecast reveals that President Donald Trump’s trade war with China is causing harm to the U.S. economy and the federal budget deficit is ballooning faster than anticipated, according to Bloomberg News.
The non-partisan group’s report noted that the budget deficit is expected to rise to $1 trillion by fiscal year 2020, which is a full two years earlier than prior estimates.
In January, the CBO predicted a shortfall of $890 billion next year and that it would widen to $1 trillion in 2022.
The last time the federal deficit reached such heights was in 2012, Bloomberg recalled, when the U.S. was still recovering from the financial crisis.
Trump’s top economic advisor, Larry Kudlow, said last year that the deficit “coming down, and it’s coming down rapidly,” and as recently as July, Kudlow said the deficit is “quite manageable” and is not “a huge problem.”
But the CBO report contradicts such a rosy outlook.