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The Tax Cuts and Jobs Act of 2017 Has Not Paid for Itself

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Donald Trump, Mike Pence, Mitch McConnell, and Paul Ryan celebrate the passage of the Tax Cuts and Jobs Act of 2017 on the South Lawn of the White House.

Earlier this month, the United States Treasury Department announced in its monthly report on government receipts and outlays that the federal deficit—the gap between what the U.S. government spends and the revenues it receives—for the months of October of 2018 through January of 2019 was $310 billion, a 77 percent increase over the same time period last year. The reason for the increase is simple: tax revenues fell and government spending increased.

This is not surprising. Pretty much every credible economic model has projected that the federal deficit—and, thus, debt—would increase. Back in January, the Congressional Budget Office projected that the annual deficit in 2019 would hit $900 billion, and start to top $1 trillion beginning in 2022. (This projection actually represented a slight improvement on previous ones, which predicted the deficit would be $75 billion higher in 2019.)

The drivers of the deficit are also not a mystery. In 2017, the GOP-controlled House of Representatives and Senate passed the Tax Cuts and Jobs Act, which dramatically cut tax rates and which credible economists uniformly predicted would decrease government revenues and increase deficits. Shortly thereafter, Congress negotiated a budget deal that significantly increased government spending. This chart, pulled from data from the Committee for a Responsible Federal Budget, illustrates the drivers of the deficit:

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