The White House on Wednesday said that reducing the nation’s record debt will be a second-term priority for President Trump.
Asked about Congressional Budget Office projections that the annual deficit will reach $3.3 trillion by the end of the fiscal year this month, White House press secretary Kayleigh McEnany said Wednesday “the debt is a big second-term priority” for President Trump.
“We believe unprecedented growth will go a long way in solving the problem but it is certainly a second-term priority,” she said, echoing promises Trump made in 2016 and in the early days of his presidency.
The annual deficit this year is projected to reach an unprecedented level that dwarfs the record $1.4 trillion deficit from 2009.
The accumulated debt is on track to surpass the size of the entire economy next year for the first time since World War II, and breach its all-time record in the coming years.
On the 2016 campaign trail, Trump promised to wipe out the nation’s debt altogether over the course of his presidency.
The primary tool for doing that, he said, would be to juice the economy, producing unprecedented, consistent annual growth rates upwards of 3, 4, 5, even 6 percent to bring revenues up and dwarf the debt, which is frequently measured in comparison to the size of the economy.
But the unprecedented growth failed to materialize, never reaching 3 percent over the course of a full calendar year.
Instead, the GOP’s unfunded tax cuts added a projected $1.9 trillion to deficits over the course of a decade, even after accounting for their effects on economic growth.
At the same time, Trump insisted on supercharging the level of defense spending, and agreed to Democratic demands for similarly large increases in domestic spending.
Annual deficits jumped from $587 billion in 2016 to just shy of $1 trillion in 2019, an increase of two-thirds. Economists say periods of economic growth should be used to pay down debts and prepare for a rainy day.
The precipitous increase in the deficit since last year, however, is largely due to the COVID-19 pandemic and the unprecedented level of fiscal response that kept the economy from collapsing during a period of lockdowns.
Top economic officials including Federal Reserve Chairman Jerome Powell say that a strong fiscal response is key to supporting a robust economic recovery.
Many fiscal hawks acknowledge that the debt should be tackled only after the crisis abates, but warn that it will be a serious and difficult undertaking when it does, involving some combination of tax increases and spending cuts.
Morgan Chalfant contributed.