The U.S. issue with the budget deficit is the main impediment for the tax reform offered by the American President and other Republican congressmen, with one top Senator saying soon after the plan was announced that his support could be completely shattered by any widening of the fiscal gap.
The deficit was the stumbling block for a number of federal programs, including improvements to infrastructure or defense build-up, the same is happening to the new reform plan. The administration and chairmen involved in tax-writing seem to be making off already, and it is dispiriting to see the lack of courage, said Senator Bob Corker.
The core problem is that the country’s yearly deficit makes up $550 billion and a national debt, which is the sum of past deficits together with interest owed to lenders to the treasury, going beyond $20 trillion. The proposed tax reform seeks for tax reduction equal to $6 trillion that would drastically diminish federal income.
Notably, no comparable reductions in spending have been proposed. Thus in the given form the tax cuts proposed by the U.S. President would strongly enlarge the deficit and grow the debt.