![]() Outlays are projected to decline from 31 percent of GDP this year to about 21 percent from 2023 through 2025 as pandemic-related spending wanes and low interest rates persist. Revenues in CBO’s baseline increase to 17 percent of GDP in 2021 and are relatively stable thereafter, averaging 18 percent from 2022 through 2031. Projected federal debt dips just below 100 percent of GDP between 20 before rising again, reaching 106 percent in 2031, about the same as the amount recorded in 1946, which stands as the highest in the nation’s history. As recently as 2007, at the start of the previous recession, federal debt equaled 35 percent of GDP. With such deficits, federal debt held by the public-which stood at $21.0 trillion, or 100 percent of GDP, at the end of 2020-would total $23.0 trillion, or 103 percent of GDP, at the end of 2021. The revenues and outlays of the Social Security trust funds and the net cash flow of the Postal Service are classified as off-budget. By the end of the period, both primary deficits (which exclude net outlays for interest) and interest outlays are increasing in nominal terms and as a share of GDP.ĭata source: Congressional Budget Office. In CBO’s projections, the deficit declines to about 3 percent of GDP in 20 before increasing again, reaching 5.5 percent in 2031 (see Table 1). They average 4.2 percent of GDP through 2031, well above their 50-year average of 3.3 percent. The economic disruption caused by the 2020–2021 coronavirus pandemic and the legislation enacted in response continue to weigh on the deficit (which was already large by historical standards before the pandemic).īaseline deficits under current law are significantly smaller after 2021 and average $1.2 trillion from 2022 to 2031. Relative to the size of the economy, this year’s deficit is projected to total 13.4 percent of gross domestic product (GDP), making it the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year. In CBO’s budget projections (called the baseline), the federal budget deficit for fiscal year 2021 is $3.0 trillion, nearly $130 billion less than the deficit recorded in 2020 but triple the shortfall recorded in 2019. CBO will publish more detailed information about its projections later this month. ![]() The information is less detailed so that CBO can provide it to lawmakers as quickly as possible. This presentation of CBO’s projections is much shorter than usual. This report presents the agency’s most recent budget and economic projections, which are based on the laws in effect as of May 18, 2021. ![]() The Congressional Budget Office regularly publishes reports presenting projections of what federal budget deficits, debt, revenues, and spending-and the economic path underlying them-would be for the current year and for the following 10 years if current laws governing taxes and spending generally remained unchanged.
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