Budget Office: U.S. Federal Deficit Will Top Record $1 Trillion

The White House Office of Management and Budget says the 2019 federal deficit is projected to surpass the $1 trillion-mark -- virtually the highest it's ever been.

The office reported the updated projection Monday in its mid-season review.

The report said despite the extreme deficit, it continues to project strong economic growth due to President Donald Trump's policies, perhaps most notably the sweeping overhaul to the tax code in 2017.

"The 2019 deficit has been revised to a projected $1.0 trillion, $91 billion lower than the 1.1 trillion projected in March," the review states. "The improvement in the 2019 deficit is largely the result of technical revisions, including an increase in expected receipts based on new tax reporting data and collections to date, as a decrease in outlays, primarily in mandatory and net increase spending."

Apart from the four years following the Great Recession, the U.S. deficit has never surpassed the $1 trillion-mark. The new projection worries some deficit watchers.

"The mid-session review is just the latest reminder of the dangerous fiscal path that we're on -- and it drives home the point that we are missing a valuable opportunity to start managing our debt during a time of growth and high employment," analyst Michael Peterson of the Peter G. Peterson Foundation said in a statement.

The Office of Management and Budget said the deficit should decrease by $414 billion over the next decade, based on a forecast of economic assumptions, including lower interest rates. The Federal Reserve could order a rate cut at its next policy meeting July 30.

Congress and the White House are discussing a spending increase for the next fiscal year, starting Oct. 1. Spending has risen recently, with Republicans negotiating increases for defense while Democrats seek more for domestic projects like education and healthcare.