You Better Sit Down: The CBO's Projected 10-Year Budget Deficit

The good news is the Congressional Budget Office (CBO) projects a lower federal deficit for Fiscal Year 2024. But don’t break out the champagne and party hats just yet. The projection assumes the deficit will decrease from $1.7 trillion in FY2023 to … wait for it … $1.6 trillion this year. The bad news is the annual deficit starts growing again in 2025.
 

 
The CBO says the deficit will grow to $1.8 trillion in 2025, return to $1.6 trillion in 2026, and then begin steadily increasing to $2.6 trillion by 2034.
 
If you think total current federal debt—which is essentially the sum of past annual deficits—of $34.2 trillion is excessive now, wait until 2034. If we add in the increasing annual projected deficits, we are looking at something like $21.5 trillion more debt over the next decade—a 63 percent increase. That increase would put the federal debt at roughly $55.7 trillion.
 
And that’s only if we can push Congresses and President Joe Biden—and any future presidents and Congresses—to stay within the CBO-projected spending estimates. That won’t be easy.
 
The Senate has passed a $95 billion additional spending package, though it faces an uncertain prospect of passing the House.While we generally support additional aid to Ukraine, Israel and Taiwan, that package would likely push the deficit back to $1.7 trillion, the same as last year’s.
 
Oh, and did I mention that the $1.7 trillion deficit last year was only the CBO’s projection. It actually came in at $2 trillion, thanks to several programs—like the Democrats’ Inflation Reduction Act—which is costing a lot more than promised. As the Wall Street Journal just reported, “The Congressional Budget Office this week bumped up its projection of the law’s climate tax credits through fiscal year 2033 by $428 billion …”
 
That’s nearly an additional half a trillion dollars over the next decade.
 
The point is that federal spending is more than out of control, and it doesn’t appear either party—or either of the leading presidential candidates, for that matter—is really serious about controlling it.