What is CBO’s estimate of the budget deficit for 2024? What was the deficit for 2023?
CBO’s latest estimate (reported in February 2024) of the total federal budget deficit for fiscal year 2024 (which ends on September 30) is $1.5 trillion, or 5.3 percent of gross domestic product (GDP). That estimate incorporates the effects of legislation enacted as of January 3, 2024, and does not include the effects of any subsequent legislation. The federal government ran a budget deficit of $1.7 trillion in fiscal year 2023, equal to 6.3 percent of GDP.
If adjusted to exclude the effects of shifts that occur in the timing of certain payments when the first day of the fiscal year falls on a weekend, the deficit for 2024 would be $1.6 trillion (5.6 percent of GDP), and the deficit for 2023 would be $1.7 trillion (6.2 percent of GDP).
The 2023 deficit was significantly affected by actions related to the Administration’s plan to cancel outstanding student loans for many borrowers. Those actions resulted in largely offsetting changes to the deficit in the past two years. In September 2022, in keeping with the budgetary procedures used to estimate the costs of federal credit programs, the Administration recorded outlays of $379 billion to reflect its estimate of the long-term costs of debt cancellation, which increased the deficit in fiscal year 2022. Because of a June 2023 Supreme Court decision, however, the cancellation plan was never implemented. As a result, in August 2023, the Administration recorded a $333 billion reduction in outlays for the student loan program. That action reduced the fiscal year 2023 deficit. If the reversal of the Administration’s plan for student loan cancellations was excluded from the calculation of the deficit in 2023, the deficit that year would have been larger—$2.0 trillion instead of $1.7 trillion—and the projected decline in deficits from 2023 to 2024 would be $0.4 trillion rather than $0.1 trillion.
Our Budget page provides quick links to our 10-year and long-term budget projections.
Where can I find CBO's latest budget and economic projections?
CBO issues 10-year budget projections (usually three times a year), 10-year economic forecasts (usually twice a year), reports on spending and revenues in the current fiscal year (monthly), and long-term budget projections (once a year).
How do I find budget options and reports with policy options?
CBO produces numerous reports with specific options and broad approaches for changing federal tax and spending policies.
CBO periodically issues a volume of policy options—often referred to as "Budget Options"—covering a broad range of issues as well as separate reports that include policy options in particular areas.
Find budget options from recent volumes as well as some options that appeared in separate reports on CBO's digital budget options page. You can sort by major budget category (mandatory spending, discretionary spending, or revenues), budget function (such as national defense, transportation, or income security), and by topic (such as housing, Medicare, or business and finance).
A related page—Reports with Policy Options—organizes CBO's analytic reports that include policy options by broad issue area.
In addition to the budget options volume and various analytic reports, another report—Choices for Deficit Reduction: An Update—frames the choices that policymakers need to make, summarizes policy alternatives, and provides criteria that might be used to evaluate policy changes. (This is a companion report to CBO's 2013 budget options volume, but the information presented is still largely relevant.)
Note: The agency's most recent estimate of the budgetary effects of an option might differ from previous estimates or future estimates for various reasons. One reason is that the effects of policy options are measured relative to CBO's latest projections of budget outcomes under current law; when CBO's "baseline" projections change, the options' estimated budgetary effects can change as well. Another reason is that CBO regularly incorporates new analysis—by the agency or others—in order to improve its estimates. A third reason that estimates can change over time is that the details of largely similar options may differ in ways that give rise to differences in their budgetary effects.
What is a cost estimate? When does CBO prepare cost estimates for legislation? How can I get a cost estimate?
A cost estimate states the likely effects of proposed legislation on the federal budget—compared with what future spending and revenues would be under current law.
CBO is required by law to produce a cost estimate for nearly every bill that is approved by a full committee of either the House or the Senate; the only exceptions are appropriation bills, which do not receive written cost estimates but whose budgetary effects CBO estimates for the Appropriations Committees. CBO also produces cost estimates at other stages of the legislative process if requested to do so by a relevant committee or by the Congressional leadership. Moreover, the agency fulfills thousands of requests for technical assistance as committees are considering which legislation to advance, as amendments to legislation are being debated, and at other stages in the legislative process.
By law, CBO’s primary responsibility is to Congressional committees, but to the extent practicable, the agency also provides information to Members’ offices. The most common request is for a preliminary estimate of the effects on mandatory spending of a bill or a tentative proposal; CBO’s assistance may also involve answering general questions about the budget or responding to questions about previously published cost estimates.
Individual Members seeking a review of their bill may submit a request, with any draft language attached or the bill number referenced, by email to email@example.com. If time allows, CBO provides preliminary feedback about a bill’s possible effects on direct spending, usually by phone or email. If analysts cannot work on a request right away, the agency will provide a sense of whether and when they can.
Our Cost Estimates page provides all of our estimates in chronological order, with the most recent estimates shown first. The estimates are searchable by the number, title, committee, and program area of bills. View our Frequently Asked Questions About CBO Cost Estimates to learn more about CBO’s estimates.
What is a budget resolution? What role does CBO play when the Congress considers a budget resolution?
A budget resolution is basically a blueprint to guide Congressional action on budget-related legislation over the course of the year. It does not provide funding for federal programs or change tax law; rather, it sets overall spending and revenue targets, sometimes for as many as 10 years. A budget resolution is not a law, because it is not signed by the President; it takes effect if approved by both Houses of Congress.
The committee report that accompanies the budget resolution provides an allocation of new spending authority and outlays among the Congressional committees that have jurisdiction over legislation that governs such spending. Sometimes those allocations give committees the budgetary flexibility to propose legislation that would increase projected deficits, and sometimes such allocations require the committees to take actions that would reduce those deficits. A budget resolution may include “reconciliation instructions” that direct committees to propose legislation having a certain budgetary result; any bill aimed at satisfying those instructions is entitled to expedited consideration in the House and Senate.
CBO assists the budget committees by providing baseline budget projections that show what the budget would look like if current laws about federal spending and revenues generally remained in place. Those projections usually serve as the basis for the budget resolution. We also provide a reference volume examining options for reducing budget deficits (usually every two years) and informal estimates of the budgetary effects of various legislative proposals that the committees might want to allow for in the budget resolution; the budget committees may use those estimates as a guide in setting the spending and revenue targets for the budget as a whole and for individual committees. Although the budget committees’ reports provide some information about what policies they envision, the budget resolution itself does not specify those policies.
CBO does not analyze or prepare estimates of budget resolutions, because they are targets for the Congress and its committees and do not contain legislative language about specific proposals whose budgetary effects we could estimate. Thus, CBO does not assess the budget deficits or the amounts of spending and revenues that would result from any budget resolution approved by either of the budget committees.
Additionally, although CBO does not analyze budget resolutions themselves, the budget committees have sometimes found it helpful for CBO to evaluate the budgetary impact of streams of revenues and outlays specified by their respective Chairmen (as we did in 2015 and in 2017, for example).
Does CBO do "dynamic analysis"?
The short answer: Yes, but not for most cost estimates.
CBO’s cost estimates focus on the budgetary consequences of proposed legislation, and they generally reflect likely behavioral responses to a proposal—for example, changes in the likelihood that people will claim a government benefit. "Dynamic analysis" refers to something different: instances in which CBO takes into account the effects on the total output of the economy. Those broad macroeconomic changes—which include changes in the aggregate labor supply or private investment—resulting from changes in fiscal policy can themselves have additional budgetary consequences. By long-standing convention, such consequences are not generally reflected in CBO’s cost estimates because most of the legislation that CBO analyzes would have negligible macroeconomic effects.
The House rules for the 118th Congress require CBO to prepare dynamic analyses under certain circumstances. Specifically, the agency is required, to the greatest extent practicable, to incorporate the budgetary impact of macroeconomic effects into its 10-year cost estimates for "major" legislation that Congressional authorizing committees approved. (Major legislation is defined as either having a gross budgetary effect, before macroeconomic effects are incorporated, equal to or greater than 0.25 percent of gross domestic product in any year over the next 10 years, or having been designated as such by the Chairman of either the House Budget Committee or the Joint Committee on Taxation.) Previous Congresses have required such analysis. For example, during the 114th Congress, that requirement appeared in the House rules and concurrent resolution on the budget for fiscal year 2016, and in the 115th Congress, it was in the House rules and concurrent resolution on the budget for fiscal year 2018. An example of how CBO implemented the requirement can be seen in a cost estimate for H.R. 3762, the Restoring Americans’ Healthcare Freedom Reconciliation Act.
In general, completing dynamic analyses of all proposed legislation is not practicable, because such analyses tend to require complex modeling and a significant amount of time and resources. And as discussed above, most of the legislation that CBO analyzes would have negligible macroeconomic effects and thus negligible additional budgetary consequences. Among the few exceptions was a cost estimate in 2013 for immigration legislation that would have substantially expanded the U.S. labor force. That estimate included the direct budgetary effects of increasing the number of people in the United States but did not incorporate all of the effects on the economy that CBO expects would have occurred.
In certain analyses other than cost estimates, CBO does study how proposals that would significantly change federal spending and tax policies would affect the overall economy, as well as how such effects would feed back into the federal budget. In 2021, for example, CBO published Effects of Physical Infrastructure Spending on the Economy and the Budget Under Two Illustrative Scenarios. Other reports presenting such analyses include the agency’s analysis of the macroeconomic effects of Public Law 115-97 (originally called the Tax Cuts and Jobs Act), examinations of the economic impact of the President’s budget, and several reports on the macroeconomic effects of alternative budgetary paths. And finally, CBO’s baseline budget projections, published in its recurring reports about the budget and economic outlook, and the long-term projections in its annual Long-Term Budget Outlook also incorporate macroeconomic effects.
Visit CBO’s Dynamic Analysis web page for work in this area, and see a presentation about dynamic analysis published in 2022. (Also, see Economic Effects of Fiscal Policy for additional analyses focused mainly on economic outcomes.)
How does CBO account for new information in its estimates?
CBO typically updates its baseline budget projections at specific times each year to reflect legislative action, economic changes, and other developments. Generally, the budgetary impact of legislation being considered in the House or Senate is measured relative to the baseline produced in the spring.
During the course of a year, however, events sometimes occur that are different from those anticipated in developing the baseline projections. In such cases, CBO follows long-standing procedures governing when and how to take into account such developments, which sometimes include the enactment of legislation, actions by the courts, or decisions by executive branch agencies.
If new information indicates that an action or event that would affect CBO’s baseline has happened or definitely will happen (such as a Supreme Court decision, or an agency issuing a final rule or making an official announcement that clearly indicates an intended action by the Administration), CBO incorporates that information in its next regular baseline update. In addition, CBO immediately takes that information into account in assessing what will happen under current law when it analyzes the effects of legislation being considered by the Congress, even if the agency has not published new baseline projections.
Does CBO take into account the effects of climate change in its economic projections?
CBO takes into account many factors in producing its standard 10-year and long-term (spanning 30 years) economic forecasts, including the effects of climate change on the growth of real U.S. gross domestic product (that is, the growth of GDP adjusted to remove the effects of inflation).
Climate change is expected to affect GDP in many ways, some of which will increase economic output and some of which will reduce it. CBO expects that climate change will, on net, reduce GDP. Consistent with the best available research, CBO’s analytical approach allows for both positive and negative effects of climate change. Still, any projections of the economic effects of climate change involve a great deal of uncertainty.
Drawing on studies that examine the historical relationship between regional output and regional temperature and precipitation, along with projections of future conditions, CBO has projected that, on net, climate change will lower real GDP in 2051 by 1.0 percent from what it would have been if climatic conditions from 2021 to 2051 were the same as they were at the end of the 20th century. That figure represents a projection in the middle of a wide range of possible outcomes and does not reflect all the ways that climate change could affect GDP. Of that 1.0 percent reduction in GDP, 0.8 percent is attributable to changes in temperature and precipitation, and 0.2 percent is attributable to hurricane damage.
How does climate change affect the federal budget?
Climate change increases federal budget deficits, on net, by reducing revenues and increasing mandatory spending, both through its broad effects on the economy—which are negative, on average—and its specific effects on certain programs.
In particular, revenues are affected by net reductions in the productivity of outdoor labor and agricultural land and by damage to physical capital and infrastructure. Those changes affect the amount of federal revenues from income taxes, payroll taxes, and other sources. Climate change can also affect mandatory spending programs through changes in the economy overall and through specific effects on particular programs, including agricultural support programs, the National Flood Insurance Program, and a broad range of other insurance and benefit programs, such as those for income security, health, and financial institutions.
Climate change may also increase the amount of discretionary funding the Congress provides for certain activities and programs. For instance, military installations and equipment and public infrastructure may require repairs or modifications in response to damage from, or risks posed by, storms, sea-level rise, and other events. Various assistance programs may also be affected, such as those for disaster relief, wildfire control, and loans and loan guarantees for home mortgages.
Learn more in our 2021 report on the subject.
How would the federal government’s efforts to adapt to climate change or mitigate its impact affect the budget? Does CBO take into account the potential budgetary savings from those efforts in its cost estimates?
Investment by the government or others in various types of mitigation or adaptation efforts—for example, efforts to reduce emissions of greenhouse gases or to restore coastal wetlands to decrease the risk of floods—could reduce the budgetary costs of climate change. The benefits of successful investments would generally accrue gradually over many years and might be only partially reflected in future savings to the federal budget. The extent of future budgetary savings might sometimes be a small proportion of the up-front costs. Currently, CBO has no basis for estimating future savings from such investments because many of the linkages between climate change and the federal budget require further assessment.
For some sufficiently large and effective efforts, increases in total output of the economy would be the main channel by which future budgetary savings would occur. Those savings might be less important than other benefits. One key challenge in estimating future budgetary savings from investments in mitigation or adaptation is that, at present, we do not have enough information to estimate the long-lasting and diffuse effects of such investments. CBO continues to consult with various experts and to seek new data and scientific research on climate change.
You can learn more in our 2021 report on the subject.
What are CBO's latest spending projections for Medicare, Medicaid, and the other major health care programs?
For CBO’s latest projections of spending for the major health care programs, see Table 1-4 in the 10-year budget projections that CBO released in February 2024.
How many people have health insurance in 2023?
The most recent estimates by CBO are presented in Table A-1 in the September 2023 report Federal Subsidies for Health Insurance: 2023 to 2033. For the first time, those estimates reflect the entire population instead of only the civilian noninstitutionalized population younger than 65.
An average of 312 million people will have health insurance in any given month in 2023, CBO estimates. (CBO considers people insured if they are covered by an insurance plan or enrolled in a government program that provides financial protection against major medical expenses.) An estimated 161 million people (48 percent of the population) have employment-based coverage, 90 million (27 percent) are enrolled in Medicaid or the Children’s Health Insurance Program, and 60 million (18 percent) have coverage through the Medicare program. A smaller number have nongroup coverage, coverage through the Basic Health Program, or coverage through some other source. An average of 24 million people—7 percent of the population—are estimated to be uninsured.
The sum of estimated enrollment in each source of insurance and the projected number of uninsured people exceeds the total population because some people (an estimated 8 percent of the insured population in 2023) have multiple sources of coverage. CBO did not assign those people a primary source of coverage. That approach better aligns the agency’s projections with information about health insurance coverage from household surveys and administrative data and with the federal budgetary effects reported in administrative data than would assigning such people to a single category.
How large are the projected federal subsidies associated with health insurance coverage?
CBO and the staff of the Joint Committee on Taxation’s (JCT’s) most recent estimates of net federal subsidies for health insurance (that is, subsidies minus certain payments, such as Medicare premiums, amounts paid to providers and later recovered, and penalty payments) are presented in Table A-2 in Federal Subsidies for Health Insurance: 2023 to 2033. Like the health insurance coverage estimates, the latest federal subsidy estimates now account for the entire population, whereas they previously reflected only the civilian noninstitutionalized population younger than 65.
The federal government subsidizes health insurance coverage in four main ways (listed in descending order by the number of people affected):
- By offering tax benefits for employment-based coverage to employers and employees—namely, by excluding amounts paid for health insurance premiums from income and payroll taxes;
- By providing about two-thirds of all funding for Medicaid and the Children’s Health Insurance Program (CHIP), programs aimed at insuring people with low income and people with disabilities;
- By paying for most of the cost of coverage through the Medicare program, which insures people 65 or older and people younger than 65 who have certain disabilities or end-stage renal disease; and
- By offering tax credits to eligible people who purchase nongroup coverage through the health insurance marketplaces established under the Affordable Care Act (ACA), as well as by covering much of the cost of coverage through a Basic Health Program, which states can establish under that law.
CBO and JCT’s estimates of federal subsidies for health insurance thus include both spending (that is, outlays) and reductions in revenues that the federal government incurs to offset the costs of health insurance.
By the agencies’ estimates, net federal subsidies for health insurance will total $1.8 trillion, or 7.0 percent of gross domestic product (GDP), in 2023. By 2033, if current laws governing taxes and spending generally remain unchanged, those subsidies are projected to grow substantially, amounting to $3.3 trillion, or 8.3 percent of GDP. Over the 2024–2033 period, the 10 years spanned by CBO’s current baseline projections, net federal subsidies in CBO and JCT’s projections total $25.0 trillion, distributed as follows:
- Medicare—$11.7 trillion (47 percent),
- Medicaid and CHIP—$6.3 trillion (25 percent),
- Employment-based coverage—$5.3 trillion (21 percent),
- Coverage obtained through the marketplaces established by the ACA or through the Basic Health Program—$1.1 trillion (4 percent), and
- Other federal subsidies—$0.6 trillion (2 percent).
Those estimates do not include discretionary outlays (such as spending on veterans’ health programs) or outlays made by the federal government in its capacity as an employer (such as spending on the Federal Employees Health Benefits program and the military’s TRICARE health program). For additional details about the baseline projections for Medicare, Medicaid, and CHIP, see the program-specific baseline tables.
How many people, according to CBO and JCT's estimates, will have insurance coverage through the health insurance marketplaces?
Many people can purchase subsidized health insurance coverage through the marketplaces established by the Affordable Care Act, which are operated by the federal government, state governments, or partnerships between the federal and state governments. CBO and the staff of the Joint Committee on Taxation (JCT) estimate that, in an average month, about 15 million people will be covered by insurance purchased through the marketplaces in 2023. The agencies estimate that 14 million of those people will receive subsidies to purchase their coverage.
A total of 16 million people selected plans through the marketplaces by the close of the 2023 open-enrollment period. However, CBO and JCT estimate that the average monthly enrollment during the year will be lower than the total number of people who will have coverage at some point during the year because some people are covered for only part of the year—mostly because they stop paying the premiums or leave their marketplace-based coverage as they become eligible for insurance through other sources. That decline in coverage is partly offset because people who experience a qualifying life event (such as a change in income, the addition of a dependent, or the loss of employment-based insurance) may be allowed to purchase coverage later in the year.
Over the 2024–2033 period, average enrollment is projected to be 14 million people. Depending on the year, between 88 percent and 94 percent of enrollees are expected to receive subsidies to purchase their coverage through the marketplaces.
How often does CBO update its model underlying the agency’s baseline estimates of health insurance coverage?
CBO updates its health insurance simulation model at least once a year to incorporate information from the most recent administrative and survey data, CBO’s most recent macroeconomic forecast, and relevant judicial decisions, enacted legislation, and administrative actions.
How do I find CBO's major reports?
Looking for current and previous installments of CBO's Budget and Economic Outlook, Long-Term Budget Outlook, or Analysis of the President's Budget?
CBO's page on major recurring reports has links to those and other key reports going back to 2000.
How can I learn about CBO's products, processes, and organization?
Visit our About CBO section to learn more.
Where can I learn about CBO's career and business opportunities?
Visit our About CBO section to learn more.
Where can I find some definitions of key terms used in your reports? For example, what's the difference between the deficit and the debt?
CBO' s glossary defines various economic and budgetary terms as they are used in our reports. The document is updated periodically—most recently in 2016.