US deficit could hit $3.3T in 2020, amplified by coronavirus relief spending: CBO
The latest projection is for the largest deficit recorded since World War II
The Congressional Budget Office estimated in an updated report released on Wednesday that the federal budget deficit could hit $3.3 trillion this year, which would triple the deficit recorded last year.
The forecast represents 16% of gross domestic product – which would be the largest deficit recorded since World War II.
As a result, federal debt held by the public this year could increase to 98% of GDP.
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The $2.2 trillion increase over March estimates was largely attributed to legislation passed in response to the pandemic.
The CBO’s updated deficit projections exceed its 50-year average of 3% in each year through 2030. At that time, debt could equal 109% of GDP.
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Meanwhile, the White House is clashing with Democratic leadership over the cost of a potential additional stimulus package. White House chief of staff Mark Meadows said last week that the president was prepared to sign a $1.3 trillion bill, but House Speaker Nancy Pelosi has said she wanted something closer to $2.2 trillion.
On Tuesday, a spokesperson from Speaker Pelosi’s office said Democrats were willing to come down on their spending request – but indicated that they needed compromise on behalf of Republicans in order to do so.
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