AAF’s Director of Fiscal Policy Gordon Gray breaks down the key points of the Congressional Budget Office’s (CBO) newly released The Budget and Economic Outlook: 2022-2032. The update shows that despite the rapid recovery from the pandemic-induced recession, the United States is grappling with new challenges such as high inflation and interest rates, notes Gray.

Key points:

• According to new projections from CBO, the national debt will eclipse the highest levels in U.S. history by the end of fiscal year 2031.
• Since CBO’s last baseline update in July, improved economic growth and inflation have increased revenue collections, but the combination of more deficit-financed spending, interest costs, and other economic factors has contributed an estimated $2.4 trillion in higher deficits on net, with debt service payments increasing by over $1.8 trillion over a comparable period.
• The CBO outlook shows a federal budget that reflects the risks from running structural deficits with high levels of indebtedness.

Read the analysis