Government report says US budget deficit set to hit $897B

State of the Union 2018 (Official White House Photo by Shealah Craighead)

A new government report says that the U.S. budget deficit is set to hit $897 billion this year and predicts that economic growth will slow as the effects of President Donald Trump's tax cut on business investment begin to drop off.

The Congressional Budget Office Report predicts a $118 billion increase over last year's $779 billion deficit.

LISTEN: AP Economics Correspondent Marty Crutsinger discusses the deficit with Tom Fitzgerald on FOX 5's "On The Hill" podcast

The CBO the edicts in a report released Monday that the economy will grow by 2.3 percent this year, a slowdown from 3.1 percent last year.

The report comes as the government is reopening after a 35-day partial shutdown. The CBO says the shutdown will have a modest negative impact on the economy.

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The report lands in a divided Washington, where neither Trump nor Democrats controlling the House are expected to make curbing the deficit a priority.