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Photo: Rarrarorro/Getty Images

A new report from the Congressional Budget Office shows that the U.S. budget deficit is expected to breach $1 trillion by 2020, two years earlier than previously projected.

The big picture: The growing deficit has been driven by President Trump's tax cuts, increased government spending and rising health care costs. The shortfall is expected to be widened by the recent budget deal reached by Trump and Congress to lift spending caps by $320 billion, as well as the emergency spending package that Congress passed to help manage the migrant crisis at the U.S.-Mexico border, the Washington Post reports.

By the numbers: The U.S. budget deficit is expected to hit $960 billion this year and reach a $1.2 trillion average per year between 2020 and 2029.

  • The deficit projection for 2019 is up $63 billion from the CBO's last report in May.
  • The CBO says Trump's tariffs have affected business investment and are expected to make gross domestic product 0.3% smaller by 2020 than it otherwise would have been. Additional tariffs could curb growth even further.
  • Trump's trade wars are projected to reduce average income by $580 per U.S. household, The Hill reports.

Of note: CBO director Phillip Swagel told CNBC the deficit is expected to be even more strained after 2029, as a boom in aging population, increased interest costs and health care spending will have taken its toll.

Between the lines: Axios' Jim VandeHei notes that Trump "promised in a 2016 interview, with the WashPost's Bob Woodward and Robert Costa, to wipe out the national debt in eight years. Instead, he's increased the deficit and inflated the debt by trillions."

Go deeper ... Chart: How the U.S. budget deficit has fluctuated since the 1980s

Editor's note: The attribution for the last quote was corrected, to show it was written by Jim VandeHei.

Go deeper

5 hours ago - Politics & Policy

Rahm Emanuel floated for Transportation secretary

Rahm Emanuel. Photo: Joshua Lott for The Washington Post via Getty Images

President-elect Biden is strongly considering Rahm Emanuel to run the Department of Transportation, weighing the former Chicago mayor’s experience on infrastructure spending against concerns from progressives over his policing record.

Why it matters: The DOT could effectively become the new Commerce Department, as infrastructure spending, smart cities construction and the rollout of drone-delivery programs take on increasing economic weight.

5 hours ago - Politics & Policy

Biden turns to experienced hands for White House economic team

Illustration: Sarah Grillo/Axios

Joe Biden plans to announce Cecilia Rouse and Brian Deese as part of his economic team and Neera Tanden to head the Office of Management and Budget, sources tell Axios.

Why it matters: These are experienced hands. Unveiling a diverse group of advisers also may draw attention away from a selection of Deese to run the National Economic Council. Some progressives have criticized his work at BlackRock, the world's largest asset management firm.

Biden taps former Obama communications director for press secretary

Photo: Mark Makela/Getty Images

Jen Psaki, who previously served as Obama's communications director, will serve as President-elect Joe Biden's press secretary, the transition team announced Sunday.

The big picture: All of the top aides in Biden's communication staff will be women, per the Washington Post, which first reported Psaki's appointment.