U.S deficit to exceed $1 trillion next year: Report

The federal budget deficit is expected to balloon to more than USD 1 trillion in the next fiscal year under the first projections taking into account the big budget deal that President Donald Trump and Congress reached, the Congressional Budget Office reported on Wednesday.

The return of USD 1 trillion annual deficits comes despite Trump's vow when running for office that he would not just balance the budget but pay down the entire national debt.

"The nation's fiscal outlook is challenging," said Phillip Swagel, director of the nonpartisan CBO.

"Federal debt, which is already high by historical standards, is on an unsustainable course."

The office upped this year's deficit projection by USD 63 billion and the cumulative deficit projection for the next decade by USD 809 billion. The higher deficit projections come even as the CBO reduced its estimate for interest rates, which lowers borrowing costs, and as it raised projections for economic growth in the near term.

The number crunchers at CBO projected that the deficit for the current fiscal year will come to USD 960 billion.

In the next fiscal year, which begins October 1, it will exceed USD 1 trillion.

The CBO said the budget deal signed into law earlier, which took away the prospect of a government shutdown in October and the threat of deep automatic spending cuts, would boost deficits by USD 1.7 trillion over the coming decade.