WASHINGTON -- The Concord Coalition said today that updated projections by the Congressional Budget Office (CBO) highlight the need for elected officials and political candidates to focus on the nation’s worsening fiscal challenges.
“While not surprising, the projections released today by the CBO are a reminder that the federal budget is on an unsustainable path with high and rapidly growing deficits,” said Concord Executive Director Robert L. Bixby. “Policymakers have shown little inclination to deal with this problem. On the contrary, prominent members of both parties seem more focused on measures that would require even more government borrowing in the years ahead. Instead of digging out of debt, Washington is digging in deeper.”
Today’s report updates the budget and economic projections that CBO released in January for the next 10 years, based on current law and assuming no recessions. The CBO’s baseline projections generally show little change since then.
The new report projects the federal deficit will reach $896 billion this year and exceed $1 trillion each year beginning in 2022 as the result of more heavy borrowing and rising interest payments. Cumulative deficits from the end of 2018 through 2029 are projected to equal $12.7 trillion.
Between 2019 and 2029, CBO says, federal debt held by the public is projected to grow from 78 percent of GDP to 92 percent of GDP -- the largest percentage since 1947 and more than twice the 50-year average.
CBO Director Keith Hall also warned: “Under an alternative fiscal scenario in which some major tax and spending policies were kept in place (rather than changing as provided in current law), far larger deficits and greater debt would result than are shown in our baseline projections.”
That alternative scenario projects an additional $4 trillion in deficits over the 10-year period with debt held by the public growing to 105 percent of GDP, “just 1 percentage point below the highest percentage ever recorded (106 percent of GDP in 1946),” according to CBO.
The CBO’s projections continue to show growing pressure on the federal budget as the result of an aging population, rising health costs and an inefficient tax system. The sooner Washington takes steps to deal with these challenges, the better.
Bixby also expressed concern over political tensions in Washington that could once again prevent an orderly congressional budget process this year and delay action on the federal debt limit that is needed to enable the government to pay its bills in a timely manner.
Media Contact: Steve Winn, [email protected], (703)254-7828
The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility. Since 1992, Concord has worked to educate the public about the causes and consequences of the federal deficit and debt, and to develop realistic solutions for sustainable budgets. For more fiscal news and analysis, visit concordcoalition.org and follow us on Twitter: @ConcordC