Updated Budget Projections: 2015 to 2025

Under current law, CBO estimates the deficit will total $486 billion in 2015, about the same as in 2014. However, because the nation’s output has increased, the projected deficit for 2015 represents a slightly lower percentage of GDP—2.7 percent.

If current laws generally remain unchanged, the budget deficit is projected to equal roughly 2.4 percent of GDP through 2018, but then rise thereafter, reaching 3.8 percent of GDP by 2025.

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Public Spending on Transportation and Water Infrastructure, 1956 to 2014

Public spending on transportation and water infrastructure totaled $416 billion in 2014; about one-quarter of that spending came from the federal government. Adjusted to remove the effects of inflation in the prices of materials and other inputs, public purchases of infrastructure fell by 9 percent from their peak in 2003 to their 2014 level. That decline occurred almost exclusively within the category of capital purchases, which fell by 23 percent after adjusting for inflation.

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CBO's Economic Forecasting Record: 2015 Update

CBO regularly evaluates the quality of its economic forecasts by comparing them with the economy’s actual performance and with forecasts by the Administration and the Blue Chip consensus (an average of about 50 private-sector forecasts).

CBO’s forecasts generally have been comparable in quality with those of the Administration and the Blue Chip consensus. When CBO’s projections have proved inaccurate by large margins, the errors have tended to reflect difficulties shared by other forecasters.

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Why CBO Projects That Actual Output Will Be Below Potential Output on Average

CBO’s estimate of the output gap—the percentage difference between actual and potential output—gauges slack or overheating in the economy. For the latter half of its 10-year projection period, CBO projects that actual output will grow at the same rate as potential output but fall short of potential by about half a percent, on average—matching the average estimated gap between actual and potential output from 1961 to 2009.

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Using ESPCs to Finance Federal Investments in Energy-Efficient Equipment

Energy savings performance contracts (ESPCs) allow federal agencies to finance investments in energy-efficient equipment through private vendors, using anticipated reductions in energy costs to pay for investments over time.

Given constraints on discretionary appropriations, ESPCs may help agencies to invest in energy-efficient equipment and reduce energy costs. However, compared with paying for such investments up front with appropriated funds, such contracts result in greater financing costs to the government.

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Updated Budget Projections: 2015 to 2025
Public Spending on Transportation and Water Infrastructure, 1956 to 2014
CBO's Economic Forecasting Record: 2015 Update
Why CBO Projects That Actual Output Will Be Below Potential Output on Average
Using ESPCs to Finance Federal Investments in Energy-Efficient Equipment