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We project revenue will fall in the next few years but eventually recover to prior-law levels as much of the recent tax bill expires.Specifically, we estimate that as the tax law takes effect, revenue will drop from 17.3 percent of GDP in 2017 to 16.4 percent in 2019 – lower than it has ever been in the last 50 years other than in the aftermath of the last two recessions.Under our alternative scenario, deficits would grow even higher, reaching .4 trillion or 8.2 percent of GDP by 2028.

In this paper, we construct our own rough budget projections based on CBO’s methods.

Without these expirations, we project revenue will remain below 17.3 percent of GDP through the entire budget window. We estimate that spending will jump from 20.8 percent of GDP in 2017 to 21.8 percent in 2019, in part because of the budget deal’s near-term increase in discretionary spending.

Spending will then gradually rise to 24.3 percent of GDP by 2028, the second-highest level as a share of GDP since World War II.

While our high and rising debt was already on an unsustainable path a year ago, our updated projections show substantial fiscal deterioration since then and suggest the country is approaching uncharted territory.

These high levels of debt will most likely crowd out productive investment, slow wage growth, and could increase the likelihood of an eventual fiscal crisis.

We also attempted to adjust GDP projections and economic feedback based on new legislation.

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