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Thanks to the latest massive budget deal passed by Congress, our nation’s fiscal situation is deteriorating even more quickly than before.
That’s the main takeaway from the Congressional Budget Office’s updated economic projections for fiscal years 2019-2029, released on Wednesday.
Estimates - Government - Means - Lawmakers - Action
The latest estimates reiterate that the federal government continues to live beyond its means. The longer lawmakers delay action to curb wasteful spending and reform unsustainable entitlement programs, the larger the burden will be for younger and future generations.
In May, the Congressional Budget Office projected the deficit would be $896 billion this year and showed it crossing the trillion-dollar threshold in 2022.
Outlook - Months - Congressional - Budget - Office
The outlook has worsened significantly in just three months. The Congressional Budget Office now projects that by the end of September, the deficit will be $960 billion and exceed $1 trillion next year.
The nation’s debt trajectory is equally alarming. Debt held by the public was 77.8% of gross domestic produce in 2018. By Sept. 30, it will be an estimated 79%, and by 2029 debt held by the public is projected to reach 95.1% of GDP—an increase of 3.3 percentage points since May.
Congressional - Budget - Office - Projects - Debt
In total, the Congressional Budget Office projects public debt will rise by $11.8 trillion over the next decade.
The problem is not a lack of money. The problem is growing spending. The Treasury took in record revenue in fiscal year 2018, and revenue projections for the coming decade dropped only slightly from May.
Blame - Worsening - Projections - Passage - Bipartisan
Much of the blame for the worsening projections owes to the passage of the Bipartisan Budget Act of 2019. Signed into law in July, the bill was the fourth in a series of two-year agreements to raise the discretionary spending caps set by the Budget Control Act of 2011.
The Bipartisan Budget Act increased base discretionary spending by $322 billion over two years and effectively killed one of the...
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