September 2, 2020
Highlights of the CBO Budget Outlook
AAF’s Director of Fiscal Policy Gordon Gray breaks down the key points of the Congressional Budget Office’s (CBO) newly released An Update to the Budget Outlook: 2020-2030. The analysis, the first to fully incorporate the impact of COVID-19, shows that the economic and budgetary consequences of the pandemic combine to push the United States into its highest levels of indebtedness in its history, Gray notes.
His central points:
- According to CBO’s projection’s, the debt will reach the highest levels in U.S. history in 2023;
- The combined economic, legislative, and technical effects of the COVID-19 pandemic are projected to add $4.4 trillion to baseline deficits, but net of substantially discounted debt service costs, the change in projected deficits since March is “only” $2.1 trillion over 2020-2030; and
- The deficit is projected to be lower, in both nominal terms and as a share of GDP, in 2025 than CBO estimated in its last projection.