The Deficit

The Congressional Budget Office (CBO) increased its deficit forecast for the current fiscal year to $3 trillion, the second year in a row hitting that mark after the pandemic relief package became law. The figure is slightly lower than the previous year's $3.1 trillion and declines further in fiscal 2022 under the new CBO forecast to $1.15 trillion. The projected $3 trillion deficit for the fiscal year that ends September 30th is $745 billion more, or 33 percent larger, than what the agency estimated in February. Spending overall for the next decade is estimated to be nearly $2.2 trillion higher than the earlier forecast with about half of the increase due to legislative impacts and the rest from economic and technical factors, but tax collections are more than $2.3 trillion higher than the February estimate. Also, the CBO forecasts the economy will grow by 7.4 percent this year an increase from 3.7 percent projected in February, but growth will fall to an average of 2.8 percent during the period of 2021 to 2025.