Outlook for the Budget and the Economy

In this report, CBO provides information about how its most recent budget projections would change under alternative assumptions about future fiscal policies and estimates the possible budgetary outcomes.

In CBO’s projections, federal budget deficits remain large by historical standards, and federal debt grows to equal 95 percent of GDP by 2029. Economic growth is expected to slow from 2.3 percent in 2019 to a rate that is below its long-run historical average.

If current laws generally remained unchanged, large budget deficits would boost federal debt to unprecedented levels over the next 30 years, CBO projects.

CBO released an interactive graphic showing the overall federal budget in fiscal year 2018 as part of its annual update of infographics on the federal budget.

CBO projects a deficit of $896 billion for 2019—$1 billion less than the deficit it projected in January. Federal debt held by the public is projected to grow from 78 percent of gross domestic product in 2019 to 92 percent in 2029.

Expanding on its earlier long-term baseline projections, CBO shows how the federal budget and the economy would evolve under three scenarios in which laws would be changed to continue certain policies now in place, leading to higher debt.

CBO has developed “rules of thumb” that show how changes in four key economic variables might affect revenues, outlays, and deficits. An interactive workbook allows users to see the budgetary effects of their own alternative scenarios.

If current laws remain generally unchanged, CBO projects, federal budget deficits and debt would increase over the next 30 years—reaching the highest level of debt relative to GDP in the nation’s history by far.

In CBO’s projections, the economy grows relatively quickly this year and next and then more slowly in the following several years. The federal budget deficit rises substantially, boosting federal debt to nearly 100 percent of GDP by 2028.

Under current law, deficits in CBO’s baseline projections continue to climb over the next decade, driving up federal debt. Economic growth remains modest, at about 2.0 percent through 2018 and then 1.9 percent later in the period.

CBO compares its economic forecast, as presented in An Update to the Budget and Economic Outlook: 2016 to 2026, with historical experience and discusses why economic growth in coming years is projected to diverge from historical trends.

CBO discusses several uncertainties in the outlook for the U.S. economy, as described in An Update to the Budget and Economic Outlook: 2016 to 2026.