Fiscal year 2018 ended on Monday for the federal government, and as budget watchdog Committee for a Responsible Federal Budget looked back over the year, one number in particular stood out: $2.4 trillion.
Or as they put it — $2,423,000,000,000.
This is how much Congress has expanded the national debt through the year 2027 via legislation passed in fiscal year 2018.
> Two pieces of deficit-financed legislation explain the vast majority of this increased borrowing – the Tax Cuts and Jobs Act of 2017 (TCJA) and the Bipartisan Budget Act of 2018 (BBA18). Looking at next year alone, TCJA is projected to add about $230 billion to the deficit, including its effects on interest costs and economic growth. BBA18 is projected to add another $190 billion. Other legislation, including to delay health-related taxes, provide for disaster relief, and fund the government, is projected to add about $30 billion.
> Taken together, legislation enacted in FY 2018 will add $445 billion to next year's deficit, enough to explain nearly half of the near trillion-dollar deficits the country is likely to face.
> Over a decade, TCJA – which is mostly in effect for eight years (compared to two years for BBA18) – is responsible for the vast majority of debt increases enacted in FY 2018. The Congressional Budget Office (CBO) recently estimated that the law will add $1.9 trillion to debt through 2027. The spending bill will add another $420 billion to the debt through 2027, mostly in the first three years. Other legislation will increase deficits by a combined $115 billion.
As it stands, the Committee for a Responsible Budget says the national debt is projected to increase from 86 percent of gross domestic product (GDP) to 94 percent due to the legislative changes.
But it could be even worse:
> The laws enacted over the past year are mostly temporary as written – though their design suggests an interest in permanency. Assuming policymakers extend all legislation enacted over the past year, we estimate a total cost of roughly $5 trillion and debt levels reaching nearly 104 percent of GDP by 2027.