Obama to exit White House with $590 billion budget deficit: CBO

Congressional Budget Office

Moreover, the CBO notes that the budget deficit is projected to be $152 billion higher than past year, and will be equal to more than three percent of economic output. That's up from 2.5 percent of GDP in fiscal 2015, and the first time in six years that deficits are rising as a share of GDP.

Within 20 years, CBO projects that entitlement spending plus interest will suck up virtually every tax dollar coming into the federal government, up from 65% of revenue today.

The federal government will fund its 2016 spending promises by borrowing another $590 billion - one-third more than its $450 billion deficit past year - further raising the national debt, according to a new report by the Congressional Budget Office.

The national debt this year will jump to the highest level since 1950 relative to the size of the economy, the Congressional Budget Office reported Tuesday. "We continue to see the same unsafe trend jeopardizing our ability to adequately fund the federal government".

The biggest chunk of mandatory spending is the automatic payments of Medicare and Social Security benefits, which are growing as the population ages and health costs rise.

By 2026, the national debt is expected to reach $23 trillion, equaling 86 percent of GDP.

The budget shortfall will climb from 3.2 percent of GDP in 2016 to 4.6 percent of GDP in 2026, according to the report.

The largest deficit America has seen is $1.4 trillion in 2009, which dropped to $485 billion in 2014. That's an increase of about one-third over last year's tally.

On the discretionary side, both Trump and Clinton have said they want to bolster infrastructure spending, which most people believe is sorely needed.

Neither presidential candidate has focused much on the deficit so far in the campaign.

MacGuineas said in a statement that instead of "prematurely declaring victory" over the lower deficits in recent years, "lawmakers should have used that period to phase in tax and spending reforms to address our nation's long-term fiscal challenges".

"Our national debt is projected to increase from $19 trillion [$19,000 billion] to nearly $30 trillion [$30,000 billion] by the end of the decade, and our current debt already exceeds our nation's GDP", Sen.

So any American concerned about the nation's mounting debt might be interested to know what Clinton or Trump would do about it. "If that happened, interest rates on federal debt would rise suddenly and sharply".

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