Updated projections by the Congressional Budget Office indicate the federal deficit in Fiscal 2016 will total $534 billion, nearly $100 billion higher than last year but $10 billion lower than CBO’s January estimate.
After declining for several years as the economy recovered from recession, deficits are rising again. Key factors in the projected deficits are the growth of “mandatory” programs — notably Social Security and certain health care programs — while revenues fail to keep pace.
The budget office projects that under current law, the federal government will add $9.3 trillion to the national debt over the next decade, pushing debt held by the public up to 86 percent of the economy (GDP), more than double the historical average.
CBO warns that Washington’s failure to put the debt on a sustainable path could result in slower economic growth, lower incomes and a greater chance of a fiscal crisis in which “the risk would rise of investors’ becoming unwilling to finance government borrowing unless they were compensated with significantly higher interest rates.”
The CBO’s projections, released Thursday, show why the presidential candidates should focus on comprehensive budget reform.
But Robert L. Bixby, executive director of The Concord Coalition, told the Fiscal Times:
“The candidates seem stubbornly resistant to reality, on fiscal issues anyway. . . . The pattern is clear. We’re back into escalating deficits unless they do something about it, and none of them are talking about bringing the deficit under control.”
Updated Budget Projections: 2016 to 2026 (CBO)
Big Deficits Loom as Candidates Pile on Spending and Tax Cuts (Fiscal Times)