Treasury building in Washington. Treasury building in Washington.

The U.S. Treasury Department announced plans to issue another record-breaking amount of debt, giving President Donald Trump’s re-election opponents more ammunition as they question whether his tax cuts will pay for themselves.

The federal budget shortfall is set to swell, driven by tax cuts, spending increases and an aging American population. As a result, the Treasury is raising its long-term debt issuance at its quarterly refunding auctions to $84 billion, the department said Wednesday, $1 billion more than three months ago. Such elevated levels of borrowing will finance the widening deficit, with Wall Street strategists projecting new debt issuance will top $1 trillion for a second straight year.

The ballooning national debt is already being drawn into the 2020 presidential election campaign. Former Starbucks Corp. CEO Howard Schultz, who is considering running as an independent, earlier this week said the U.S.’s debt levels are an example both Republicans’ and Democrats’ “reckless failure of their constitutional responsibility.”

Debt sales have already surpassed levels last seen when the country was digging out of its worst economic crisis since the Great Depression. Combined with needing to fund the shortfall, the Treasury has been selling more debt as a result of the Federal Reserve’s strategy to slowly let government debt roll off its balance sheet.

Initial tax receipts call into question the Trump administration’s projection that extra economic growth would generate enough revenue to offset its tax cuts. Corporate income taxes paid to the U.S. Treasury fell to $205 billion in the fiscal year ended Sept. 30 — a 31 percent drop from the prior year. A decrease of that magnitude is unusual during a period of economic growth.

The Congressional Budget Office forecasts the federal budget deficit will top $1 trillion in 2020, with the U.S. government spending about $7 trillion just to service that debt.

The massive fiscal shortfall has drawn concern from investors, with DoubleLine Capital LP’s Jeffrey Gundlach calling it a “horrific situation” in his annual webcast. Billionaire investor Seth A. Klarman, in a letter presented at the World Economic Forum in Davos, Switzerland, said global social tension, receding American leadership and rising debt levels all present a red flag.

In its refunding announcement, the Treasury said it will keep auctions of nominal coupon and floating-rate debt stable over the coming quarter and anticipates boosting issuance of inflation-linked securities starting in February.

Treasuries maintained their declines for the day in the wake of the announcement, with the 10-year yield touching a high of 2.73 percent in New York morning trading. Inflation-linked securities began outperforming nominal Treasuries ahead of the refunding announcement and continued to do so as the government revealed increases in TIPS auction sizes that were smaller than many dealers expected.

The department reiterated that a suspension period for the nation’s statutory debt limit ends March 1, though so-called extraordinary accounting measures can continue to finance the government temporarily. In the statement, the Treasury said it’s too early to provide a precise forecast for how long those will last.

“Treasury does not anticipate bill issuance to be as volatile as it has been in the past when prior debt limit suspension periods expired,” the agency said. It does not expect to reduce bill issuance in advance of the debt limit expiration date.

Strategists at most dealer firms had predicted Treasury would not lift nominal note and bonds sales and begin expanding TIPS issuance. That’s because bolstered auction sizes over the past four quarters, along with utilizing bills sales, is seen sufficient to allow the government to finance its funding gap with a second year of over $1 trillion in new debt.

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