February 7, 2024
Highlights of CBO’s Update to the Budget and Economic Outlook for 2024–2034
The Congressional Budget Office (CBO) released its updated budget and economic outlook, which provides Congress with a 10-year budget and economic baseline to assess the cost of legislation. Vice President for Economic Policy Gordon Gray observes that the budget outlook is incrementally improved from CBO’s May 2023 budget outlook, driven almost entirely by CBO’s projections of savings from the Fiscal Responsibility Act (FRA) projected over the budget window.
His key points:
- According to new projections from the Congressional Budget Office (CBO), the national debt will eclipse the highest levels in U.S. history by the end of fiscal year 2028.
- Since CBO’s last budget baseline update in May of 2023, the net effect of spending caps enacted under the FRA, as well as other economic and technical factors, reduces projected deficits by $1.4 trillion over 10 years.
- CBO projects weaker near-term growth, incrementally more persistent inflation, and higher interest rates than previously projected – however, this is in part a feature of stronger economic performance since CBO’s last estimate.