Please ensure Javascript is enabled for purposes of website accessibility
CBO Projects Federal Deficit Will Hit $3 Trillion This Year
gvw_ap_news
By Associated Press
Published 3 years ago on
July 1, 2021

Share

The Congressional Budget Office says that the federal budget deficit will again hit $3 trillion this year, $745 billion more than its estimate five months ago, as it takes into account the cost of President Joe Biden’s $1.9 trillion coronavirus rescue plan.

In an updated forecast Thursday, the CBO said the deficit for the current 2021 budget year, which ends Sept. 30, will be the second-largest in history, coming in shy of last year’s record shortfall of $3.13 trillion.

Federal debt, meanwhile, will rise to 102.7% of the total economy this year from 100.1% last year, according to the CBO forecast. This year’s number would eclipse last year’s as the highest debt level since the end of World War II.

The deficits in both years have been inflated by the trillions of dollars in support Congress passed at the urging of both the Trump and Biden administrations to combat a deep recession triggered by the COVID pandemic.

CBO Estimates that Economic Rebound Will Cut Deficit to $1 Trillion

The CBO estimates that, with the economy improving as vaccines are distributed and the country re-opens, the deficit for the 2022 budget year will drop to $1.15 trillion. That would still be $97 billion higher than the deficit the CBO estimate back in February.

The updated CBO estimates are the first the agency has issued since Biden succeeded in pushing a $1.9 trillion relief package through Congress in March. That measure sent economic stimulus payments of up to $1,400 per individual to millions of Americans and provided additional help to small businesses and the unemployed.

The new CBO report is based on current law and does not include the impact of two infrastructure measures that Biden is hoping to get Congress to enact. The measures include a proposal costing roughly $1 trillion that has bipartisan support to boost spending on traditional infrastructure programs such as roads and bridges, and another measure Biden and Democrats are pushing for $1.8 trillion to increase spending for such things as early childhood education and community college tuition.

Republicans Poised to Attack Democrats’ Spending Plans

The new CBO estimates project that the annual budget deficits will be above $1 trillion over the next decade except for a brief three-year period from 2023 through 2025 when the annual deficits will come in below that level.

Republicans lawmakers are certain to use the new CBO report to argue that Democrats’ spending plans are too costly at a time when the economy is recovering.

Mayra MacGuiness, president of the Committee for a Responsible Budget, said in a statement that “the strong economic growth projections from CBO show that it is time to pivot away from further deficit financing and towards paying for things and, ultimately, decreasing the national debt from its current path.”

The CBO sees the economy growing a strong 7.4% this year when compared to the fourth quarter of last year, up from a February forecast of GDP growth of 3.7% this year.

RELATED TOPICS:

DON'T MISS

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

DON'T MISS

Merced Supervisors Accused of ‘Triple Crown Race’ of Failures Amid Talk of Closing Fire Stations

DON'T MISS

Teacher Appreciation Week Surprises That Educators Will Love

DON'T MISS

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

DON'T MISS

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

DON'T MISS

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

DON'T MISS

16 Clovis Students Rewarded With Scholarships for Their Resilience

DON'T MISS

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

DON'T MISS

Reacher Star Alan Ritchson Calls Donald Trump a ‘Rapist’

DON'T MISS

Community Leaders Call for Transparency in Fresno Superintendent Search

UP NEXT

US Intelligence Finding Shows China Surging Equipment Sales to Russia to Help War Effort in Ukraine

UP NEXT

Several Writers Decline Recognition From PEN America in Protest Over Its Israel-Hamas War Stance

UP NEXT

US Consumer Sentiment Falls Slightly as Outlook for Inflation Worsens

UP NEXT

Tennessee Lawmakers Send Bill to Ban First-Cousin Marriages to Governor

UP NEXT

Instagram Blurs Nude Messages to Protect Teens, Fight Sexual Extortion

UP NEXT

Harvard Again Requiring Standardized Test Scores for Those Seeking Admission

UP NEXT

Wife of Julian Assange Says Biden’s Comments Mean Case Could Be Moving in the Right Direction

UP NEXT

Salmon Fishing Is Banned off the California Coast for the Second Year in a Row

UP NEXT

Making Cement Is Very Damaging for the Climate. One Solution Is Opening in California

UP NEXT

Mom Who Threw 2 Kids Onto LA Freeway, Killing Her Infant, Appeared Agitated by Impending Eclipse

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

10 hours ago

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

22 hours ago

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

23 hours ago

16 Clovis Students Rewarded With Scholarships for Their Resilience

24 hours ago

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

1 day ago

Reacher Star Alan Ritchson Calls Donald Trump a ‘Rapist’

1 day ago

Community Leaders Call for Transparency in Fresno Superintendent Search

1 day ago

Israeli Settlers Rampage Through a West Bank Village, Killing 1 Palestinian and Wounding 25

1 day ago

US Intelligence Finding Shows China Surging Equipment Sales to Russia to Help War Effort in Ukraine

1 day ago

From Tragedy to Triumph: The Land Before Time Litter’s Journey

1 day ago

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

When Sacramento changed its plan to demolish a homeless encampment on a vacant lot on Colfax Street, instead offering the homeless occupants...

8 hours ago

8 hours ago

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

9 hours ago

Merced Supervisors Accused of ‘Triple Crown Race’ of Failures Amid Talk of Closing Fire Stations

10 hours ago

Teacher Appreciation Week Surprises That Educators Will Love

10 hours ago

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

22 hours ago

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

23 hours ago

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

24 hours ago

16 Clovis Students Rewarded With Scholarships for Their Resilience

1 day ago

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

MENU

CONNECT WITH US

Search

Send this to a friend