The federal budget deficit will exceed $1 trillion indefinitely, the Congressional Budget Office estimated Tuesday.
The agency, Congress’s nonpartisan group of budget experts, said in its annual report on the budget that the annual deficit would reach $1 trillion in fiscal year 2020, up from $984 billion the year before, and then rise in future years to roughly $1.7 trillion in 2030.
The projected 2020 shortfall would be 4.6% of GDP, the largest such deficit since 2012.
The budget office also projected that the federal debt, which represents accumulated deficits, will reach 180% of GDP by 2050, by far the highest percentage recorded in the United States.
The CBO projected that economic growth won’t exceed 2.2% in the upcoming decade, with growth expected to slow to an annual average rate of 1.7% between 2021 and 2030. That rate of growth would fall well short of the 3% growth target set by President Trump.
“Not since World War II has the country seen deficits during times of low unemployment that are as large as those that we project — nor, in the past century, has it experienced large deficits for as long as we project,” said Phillip Swagel, the director of the budget office.
The long-term projections for the debt are higher than they were last year because the federal government’s revenues are expected to decrease and spending is expected to increase due to legislation enacted by Congress in 2019. Additionally, the budget office has lowered its projections for GDP growth, which would also increase the debt.
The amount being spent by the federal government is growing much faster than the revenue it collects, which will cause the gap between two to persist in the coming decade.
In August 2019, the budget office projected the federal budget deficit would be $960 billion in 2019 and would average $1.2 trillion in the coming decade.
