Washington - Today, the Congressional Budget Office released a topline summary of its much-anticipated update to the 2021 budget baseline. The previous installment from CBO was published in February, prior to enactment of the $1.8 trillion American Rescue Plan Act.
Concord Coalition Executive Director Robert L. Bixby said the following:
“Today’s updated CBO baseline reflects an important pivotal point for the budget between emergency responses to the COVID-19 pandemic and the post-pandemic economy. As one would expect, the staggering deficits of 2020 and 2021 will quickly decline as the economy regains its footing. What is significant, however, is not the short-term recovery but the fact that even with that recovery the deficit begins to grow again by 2025, and accelerates substantially through 2031. Absent a policy response, rising costs for the major entitlement programs, relatively flat revenues, and growing interest on the ballooning debt will overtake the economic recovery and force the debt even higher.
As the debate turns from the current crisis to the post-pandemic economy, policymakers will need to craft an agenda that is both pro-growth and fiscally responsible. An agenda premised on ever-low interest rates and ever-rising debt is not a solid foundation for a sustainable budget or a growing economy. President Biden and Congress must not lose track of this fact as they consider an agenda of new non-emergency legislation.”