Bipartisan Budget Deal Estimated to Add $1.7B to National Deficit Over Decade; 2019 Deficit Expected to Be $63B More Than Estimated in May

  • According to new analysis from the Congressional Budget Office (CBO), a massive budget deal that passed the Congress earlier this month will add $1.7 billion to the national deficit over a decade. The budget deal raises spending caps in 2020 and 2021.
  • The CBO calculated “that while the bipartisan deal increased spending for next year by about 3 percent over current levels, or $50 billion, the cap is 15 percent higher than the roughly $125 billion in budget cuts that were scheduled to go into effect.”
  • The CBO compared the new spending over a decade to scheduled cuts, and  “last year, the CBO also estimated what the deficit would look like if there were no scheduled cuts and spending only rose with inflation.”
  • The office estimated “the deficit for 2019 is expected to be $63 billion more than what it estimated in May” and will be “$809 billion more over the next 10 years, compared to its May estimate.”
  • Two things were determined to contribute to the deficit increase: “the bipartisan spending agreement that Congress passed and Trump signed Aug. 2, and supplemental appropriations for disaster relief and border security.”
  • The astronomical figure “is likely to fuel an ongoing debate about soaring deficits, which the CBO projects will near $1 trillion this year, and amount to $12.2 trillion over the next decade.”
  • Mandatory spending programs like Medicare, Medicaid and Social Security are “the main drivers of the deficits.”
  • CBO Director Phillip Swagel said: “Federal Debt, which is already high by historical standards, is on an unsustainable course, projected to rise even higher after 2029 because of the aging of the population, growth in per capita spending on health care, and rising interest costs.”
  • Swagel added: “To put it on a sustainable course, lawmakers will have to make significant changes to tax and spending policies—making revenues larger than they would be under current law, reducing spending below projected amounts, or adopting some combination of those approaches.”
  • Fiscal hawk Michael A. Peterson said: “We all know we are already on a troubling fiscal path, but today’s CBO report shows us that our leaders are making things considerably worse.”

Reference Links

  • CNBC: CBO expects deficit to grow more than projected, warns that tariff hikes could harm growth  READ
  • The Hill: Spending deal to add $1.7 trillion to deficit: CBO READ
  • NPR: The Federal Budget Deficit Is Getting Bigger As Spending Grows READ
  • Fox Business: CBO raises budget deficit estimate for 2019 and beyond READ

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