The federal debt held by the public will grow to nearly the size of the U.S. economy within 10 years under the GOP tax cut legislation, Congress's official budget experts projected Tuesday.
The Congressional Budget Office estimated that the federal debt will increase from about 75 percent of gross domestic product today to 97.5 percent in 2027, thanks to the tax cut signed last month by President Trump. Before the tax bill became law, the office only saw the debt rising to 91 percent of GDP.
The group figures that the $1.5 trillion tax cut will also mean more than $300 billion in higher interest payments on the federal debt. So altogether, the bill will add $1.8 trillion to the debt over the next decade.
Notably, Tuesday's analysis does not include the possibility that the tax cuts will spur faster economic growth, as the president and congressional Republicans have promised. Another congressional body, the Joint Committee on Taxation, found in December that the overhaul would likely provide a modest boost to the economy, enough to bring in around $400 billion in offsetting revenues over the next decade, limiting the total tax revenue loss to around $1 trillion.
With the tax cuts in place, the return of trillion-dollar federal deficits is coming sooner, according to the CBO. Tuesday's report showed the deficit rising to $700 billion this fiscal year, and then to $975 billion in 2019. In 2020, with Trump still in office, the shortfall would exceed $1 trillion. That benchmark wasn't supposed to be reached until 2022 under the projections that didn't include the tax bill.
The federal deficit is the annual difference between government spending and revenues. The debt represents accumulated deficits. The debt held by the public means Treasury securities.