On April 28, Phill Swagel, CBO’s Director, will discuss with the House Budget Committee the agency’s current economic projections for 2020 and 2021, as well as its preliminary assessment of federal budget deficits and debt in those years.
CBO projects that the nation’s output will decline sharply in the second quarter of this year and begin to rise thereafter. As a result, real GDP in the fourth quarter of 2020 is expected to be 5.6 percent lower than it was in the fourth quarter of 2019. The unemployment rate is expected to average 15 percent in the second and third quarters of 2020, higher than at any point since the early 1930s. By the third quarter of this year, about 28 million fewer people will be employed and about 9 million fewer people will be in the labor force than CBO projected in January.
CBO estimates that if current laws generally did not change, the federal deficit would be roughly $3.7 trillion in fiscal year 2020 and $2.1 trillion in fiscal year 2021. Federal debt held by the public would grow to 108 percent of GDP by the end of fiscal year 2021, up from 79 percent at the end of 2019 and the highest percentage in the nation’s history. This is not a new baseline projection, which would require much more detailed analysis and would span a much longer time period.
