CBO Budget Forecast Projects Larger Deficits After Congress Increases Spending
Should Congress work to reduce budget deficits & the national debt?
by Countable | 8.22.19
The Congressional Budget Office (CBO) on Wednesday updated its budget and economic outlook for the 2019-2029 period to project an increase in budget deficits of $872 billion over that period stemming from increased spending.
The CBO now expects the FY2019 budget deficit to be $63 billion more than it had projected in May (up to $960 billion), and that aggregate deficits over the 2020-2029 period will be $809 billion more than projected because of recently enacted bills that increased spending. Here are the factors that drove the changes in projected deficits:
- The spending levels established by the Bipartisan Budget Act of 2019 were projected to increase deficits by $1.7 trillion (including increased debt service costs) over the 2019-2029 period.
- Spending bills to provide relief for the border crisis and natural disasters are each expected to increase deficits by $0.3 trillion (for a combined total of $0.6 trillion).
- Lower than anticipated interest rates are projected to reduce the cost of servicing the national debt by $1.4 trillion over the 2019-2029 period.
While those dynamics changed the outlook, the CBO’s estimation of mandatory programs such as Social Security and Medicare along with debt service remained constant ― they’re expected to grow at a faster rate than discretionary spending on defense & domestic programs to increase annual deficits:
— Eric Revell
(Photo Credit: iStock.com / kaarsten)
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