By Richard Rubin

WASHINGTON -- Sustained federal budget deficits and debt will hit the highest levels since World War II over the next decade, according to a Congressional Budget Office report released on Tuesday.

The government will spend $1 trillion more than it collects in 2020 and deficits will exceed that amount every year for the foreseeable future. As a share of gross domestic product, the deficit will be at least 4.3% every year through 2030. That would be the longest stretch of budget deficits exceeding 4% of GDP over the past century, according to CBO.

Debt held by the public will be 81% of GDP this year and is projected to reach 98% by 2030. That stems from the combination of tax cuts and projected increases in spending -- particularly on safety-net programs such as Medicare and Social Security.

"Not since World War II has the country seen deficits during times of low unemployment that are as large as those that we project," said CBO Director Phillip Swagel.

CBO's projections assume that Congress will allow current spending and tax law to occur without any changes. Deficits and debt would be larger than projected if Congress extends individual tax cuts beyond their scheduled expiration at the end of 2025.

During his 2016 campaign, President Trump talked about paying off the federal debt within eight years. Reality has moved in the opposite direction.

In 2017, Congress enacted tax cuts championed by the president, which are projected to increase budget deficits by more than $1 trillion over a decade. Administration officials, including Treasury Secretary Steven Mnuchin, have argued that the tax cuts will pay for themselves.

But nonpartisan estimates have contested that claim, and CBO said Tuesday that it had lowered its projected revenue from the 2017 law by $110 billion to incorporate Treasury regulations that eased some international tax provisions and businesses' responses to the law.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

January 28, 2020 14:16 ET (19:16 GMT)

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