Tue. Jul 23rd, 2024

CBO raises 2024 federal budget deficit projection by $400 billion

By 37ci3 Jun19,2024

WASHINGTON – The Congressional Budget Office said Tuesday that it projects this year’s federal budget deficit will be $400 billion, a 27% increase from last year. The original estimate released in February.

Key drivers of change include: higher costs than supplemental spending package signed in April providing military aid to Ukraine and Israel; higher than the estimated cost of mitigation student loan borrower balances; Medicaid spending increases; and higher costs for FDIC insurance after the agency has yet to recover its subsequent payments The banking crises of 2023and 2024.

The report also predicts that the country’s public debt will increase from 99% of gross domestic product at the end of 2024 to 122% of GDP by the end of 2034. This is the highest level ever recorded. “, the report states.

Deficits are a challenge for lawmakers in the coming years due to the burden of servicing the entire debt burden, an aging population that increases the overall cost of Social Security and Medicare, and rising health care costs.

The report undercuts President Joe Biden’s claim that he is cutting the deficit because borrowing is expected to rise in 2023 and rise again this year.

The The budget proposal of the White House has been announced In March, it claimed it would reduce the deficit by nearly $3 trillion over the next 10 years and raise tax revenues by a total of $4.9 trillion over the same period.

White House spokeswoman Karine Jean-Pierre said in a statement that the report “is further evidence that Congress needs to pass President Biden’s budget to reduce the deficit by $3 trillion, rather than inflate the debt with $5 trillion more in Trump taxes.” they cut.”

A May CBO reports estimates Extending provisions of Trump’s Tax Cuts and Jobs Act would increase the deficit by nearly $5 trillion by 2034.

TrumpAs a presidential candidate in 2024, He recently spoke to a group of CEOs he said he would, among other things, further reduce the corporate tax rate he lowered while in office. Responsible Federal Budget Committee It estimates the 10-year cost of legislative and executive actions the bill signed by former President Donald Trump was about $8.4 trillion, including interest.

House Budget Committee Chairman Jodey Arrington, R-Texas, said in response to the growing deficit forecast, “Congress must reverse the spending curse of the Biden Administration by repealing costly and overly executive measures.”

Arrington added that “we need to address the most significant debt drivers of our mandatory spending,” including the Social Security and Medicare categories in the budget.

Michael A. Peterson, CEO of the Peter G. Peterson Foundation, said the CBO projections show a worsening outlook for America’s critical national debt problem.

“The damaging effect of the large existing debt burden, which leads to higher interest costs from higher interest rates, continues and leads to additional borrowing. This is the definition of unsustainable,” Peterson said.

“The leaders we elect this fall will face a number of high-impact fiscal deadlines, including the debt limit reset next year, the end of tax cuts and health care subsidies in 2017, major decisions on discretionary spending caps and more.”

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