(RepublicanReport.org) – Every January, the Congressional Budget Office (CBO) releases its Budget and Economic Outlook for the next 10 years. Those figures are typically updated in August and include an economic forecast and spending and revenue projections using current figures. In February, the CBO estimated the deficit for the 2024 fiscal year would be $1.6 trillion, but the office recently changed that estimate.
The CBO has since updated its baseline projections for the federal budget and the US economy over the next decade. New estimates increased the federal budget deficit to $2 trillion for the current fiscal year — a difference of $400 billion. The office cited several factors for the 27% estimated increase, including aid to Ukraine, Israel, and other Indo-Pacific regions.
CBO Director Phillip L. Swagel noted that four more factors contributed to the estimate bump: projected student loan reductions, outlays for money not covered by the FDIC following bank failures, updated legislative discretionary spending since February, and increases in Medicaid costs. Rising interest costs are also contributing to the deficit projections. The CBO estimates that the government will spend nearly $900 billion in interest payments in 2024, double the amount from 2021.
However, economic projections look strong for the US, with the estimated gross domestic product (GDP) reaching 2% — up 0.5% from February’s projections. While inflation estimates were changed from 2.1% to 2.7%, unemployment was lowered to 3.9% from 4.2% projected in February. CBO also stated that immigration is boosting the economy, reducing deficit amounts by $900,000 billion over the 10-year period outlined in the report.
While Republicans blamed Democrats and President Joe Biden for the increased budget deficit estimate, Democrats pointed the finger at the GOP. Still, the Left celebrated the economic news in the CBO report as largely positive. The White House also commented, stating the report shows that Congress needs to pass Biden’s plan of increasing taxes on the wealthy and big corporations to boost revenue.
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