Five reasons why $1 trillion deficits may not be far away for Uncle Sam

It wasn't that long ago that Republicans denounced four consecutive yearly deficits of over $1 trillion during the Obama Administration, but now that the GOP is fully in charge of the White House and Congress, it's possible the deficit may be heading back into the territory of that very large figure.

The federal deficit in 2017 was $666 billion; the Congressional Budget Office estimates it will be $699 billion in 2018, and after the first three months of the fiscal year, the deficit is running higher than a year ago at this time.

Let's look at some of the reasons why the deficit might be going up - not only this year - but in the future as well.

So, let's recap.

The CBO estimate for the budget deficit in 2018 is $699 billion, so we'll call it $700 billion.

If there is a budget caps deal, it would probably add about $100 billion in spending for this year. That's a deficit of $800 billion.

If there is $200 billion spent on hurricane and other disaster relief, then you are already bumping up against a $1 trillion deficit.

And if the new tax cuts mean stable or lower revenues in 2018 for Uncle Sam - which has happened with the last three major tax cuts in 1981, 2001 and 2003 - that could push the yearly deficit even higher.

Don't take my word for it - the Committee for a Responsible Federal Budget recently said, "failure to offset disaster funding, along with the lack of sufficient offsets for tax reform and a potential budget caps deal, is likely to lead to the return of trillion dollar deficits by next fiscal year."

You've been warned.

Don't be surprised if it happens.

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