CBO presents its projections of what federal deficits, debt, spending, and revenues would be for the next 30 years if current laws governing taxes and spending generally did not change.
By providing financial support to households, businesses, and state and local governments, federal laws enacted in response to the 2020 coronavirus pandemic will offset part of the deterioration in economic conditions brought about by the pandemic.
In a talk before the U.S. Chamber of Commerce’s Chief Economists Committee, CBO Director Phillip Swagel spoke about CBO’s latest 10-year budget projections.
CBO analyzes DoD’s plans for 2021 through 2025 as presented in the 2021 Future Years Defense Program and projects how those plans would affect defense costs through 2035.
CBO projects a federal budget deficit of $3.3 trillion in 2020, more than triple the shortfall recorded in 2019, mostly because of the economic disruption caused by the 2020 coronavirus pandemic and the enactment of legislation in response.
CBO projects that the balances held by federal trust funds will fall by $43 billion in fiscal year 2020. Spending from the trust funds is projected to exceed income by $18 billion in 2021, a deficit that grows to $502 billion by 2030.
CBO and its analyses benefit from the advisers’ understanding of cutting-edge research and the latest developments in health care delivery and financing.
CBO examined what the costs would be if the New START Treaty expired in February 2021 and the United States increased its nuclear forces to the levels specified in the Moscow, START II, or START I treaties, considering two approaches for each.
The report will contain CBO’s latest baseline budget projections, which will be based on the economic projections that the agency released in July and will incorporate legislation enacted through August 4.
The average error for CBO’s budget-year revenue projections is 1.2 percent, indicating the agency has tended to slightly overestimate revenues. For the agency’s sixth-year revenue projections, the average error is greater—5.6 percent.