CBO raises budget deficit estimate for 2019 and beyond
The Congressional Budget Office had some bad news Wednesday when it comes to the federal deficit.
The deficit for 2019 is expected to be $63 billion more than what it estimated in May, according to the CBO, and $809 billion more over the next 10 years, compared to its May estimate.
The CBO blamed two things for the 2019 deficit increase: the bipartisan spending agreement that Congress passed and Trump signed Aug. 2, and supplemental appropriations for disaster relief and border security.
The CBO routinely gives its prediction about what federal debt, deficit, spending, and revenues will look like for the existing year and over the course of the next decade.
The deficit is expected to be $960 billion this year and will be $1.2 trillion, on average, over the next 10 years.
Deficits will "fluctuate between 4.4 percent and 4.8 percent of gross domestic product (GDP), well above the average over the past 50 years," the CBO wrote. "Although both revenues and outlays grow faster than GDP over the next 10 years in CBO’s baseline projections, the gap between the two persists."
The CBO now anticipates that the debt will increase "from 79 percent of GDP in 2019 to 95 percent in 2029, its highest level since just after World War II."
As for the economy, the CBO had some good news, at least in the short term, stating that real GDP is expected to grow by 2.3% for 2019, "supporting strong labor market conditions that feature low unemployment and rising wages." After 2019 however, as a result of slowing consumer spending and a lesser rate of purchasing at all levels of government, the CBO said it expected real GDP to grow by 1.8% through 2029, which would be "less than the long-term historical average" for the last five of those years, from 2024 to 2029.
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The Trump administration said it has also warned about the ballooning deficit, though it downplayed the CBO's accuracy.
"CBO’s recent report should come as no shock, as this Administration has repeatedly issued the same warning," a senior administration official told FOX Business' Blake Burman. "It should be noted that the CBO, with its secret formulas, has been historically wrong on economic assumptions while the Administration has been on target. We hope Congress will join the President in reining in wasteful spending so future generations of Americans can enjoy success and prosperity."
Blake Burman contributed to this report.