Economy

CBO presents its projections of the federal budget for the next 30 years if current laws governing taxes and spending generally did not change. Growth in revenues would be outpaced by growth in spending, leading to rising deficits and debt.

This document provides additional information on the economic forecast that CBO initially released on February 1, 2021.

If current laws governing taxes and spending generally remain unchanged, CBO projects, in 2021, the federal budget deficit will total $2.3 trillion, federal debt will reach 102 percent of GDP, and real GDP will grow by 3.7 percent.

CBO projects that the economic expansion that began in mid-2020 will continue. Real GDP is projected to return to its prepandemic level in mid-2021. The number of people employed is projected to return to its prepandemic level in 2024.

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.

CBO projects that from 2020 to 2030, annual real GDP will be 3.4 percent lower, on average, than it projected in January. The annual unemployment rate, which was projected to average 4.2 percent, is now projected to average 6.1 percent.

This workbook allows users to enter an alternative scenario for productivity growth, labor force growth, inflation, or interest rates and see estimates of revenues, several types of spending, and deficits under those scenarios.

In CBO’s projections of the outlook under current law, deficits remain large by historical standards, federal debt grows to 98 percent of GDP by 2030, and the economy expands at an average annual rate of 1.7 percent from 2021 to 2030.

CBO’s economic forecasts have been comparable in quality to those of the Administration and the Blue Chip consensus. Large errors in CBO’s forecasts tend to reflect challenges faced by all forecasters.

How much do companies benefit from corporate inversions? In this report, CBO analyzes the reasons for and effects of inversions. CBO also projects how inversions and certain other strategies will affect future U.S. corporate tax revenues.