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Tuesday, June 25, 2019

The Fiscal Future Is Blinking Red

From CBO Director Philip Swagel:
Today, CBO released The 2019 Long-Term Budget Outlook. In that report, we present what we call our extended baseline projections—which are projections of federal spending, revenues, deficits, and debt for the next 30 years under a set of standard assumptions. Those assumptions are that current laws generally do not change but also that Social Security and Medicare benefits are paid in full even if there are insufficient resources in the trust funds associated with each program.

In our extended baseline projections, budget deficits drive federal debt held by the public to unprecedented levels. Debt rises from 78 percent of gross domestic product (GDP) in 2019, which is already high by historical standards, to 144 percent by 2049. Our projections of debt, which are slightly lower than last year’s, incorporate our central estimates of various factors, such as productivity growth and interest rates on federal debt.