CBO analysis: GOP tax plan grows economy but federal debt explodes

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According to a report from CNBC, Republican-led initiatives will boost economic growth, but the national debt will also grow.

From CNBC: The Republican overhaul of America’s tax code and increased government spending are projected to boost economic growth to 3.3 percent this year but push the national debt to nearly the same size as gross domestic product by 2028, according to government data released Monday.

The Congressional Budget Office forecast that the new tax law will generate an average of 0.7 percent growth over the decade and create 1.1 million jobs. It also predicted the two-year federal spending deal would increase GDP by 0.3 percent this year and 0.6 percent in 2019. However, larger budget deficits would crowd out private investment in later years, dampening economic growth.

As a result, the CBO estimated the cumulative deficit over the next decade will be $1.6 trillion larger than previously projected. By 2028, the national debt would total 96 percent of GDP.

Republicans both the House and Senate are deciding whether they should bring a bill to the floor that would make the individual tax rate cuts, which are included in the Tax Cuts and Jobs Act, permanent.

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