Connect with us

Hi, what are you looking for?

Latest News

Federal forecasters: Budget gap to top $1.6T this year, growing another $1T over next decade

The federal budget gap is expected to top $1.6 trillion this year and grow by another $1 trillion over the next decade, the Congressional Budget Office said Wednesday.

In its latest 10-year outlook for the federal budget and the economy, the federal forecaster said the widening deficit, or the difference between how much money the government spends and takes in, is largely driven by a greater share of federal spending on net interest costs, an aging population, and higher spending on mandatory programs like Medicare, Medicaid and Social Security.

Federal spending on net interest costs, in particular, is ballooning. Beginning next year, the amount of money that the government spends on servicing federal debt is expected to be greater in relation to the size of the economy than at any other point since 1940, according to the budget office.

CBO’s deficit projections are still lower than last year’s estimate, thanks in part to the bipartisan debt limit deal Congress passed last summer, greater economic output and stagnant government funding more than four months into fiscal 2024.

Relative to the size of the economy, federal debt is expected to rise from 99 percent this year to 116 percent of GDP in the next decade, blowing past its historical high and skyrocketing to 172 percent of GDP by 2054.

Those debt projections are lower than the budget office’s past forecast, as well. Last year CBO predicted the debt-to-GDP ratio could reach 129 percent of GDP within a decade, and 192 percent within 30 years.

On the heels of a now-doomed border security deal in the Senate that sought to curb immigration, the budget office also notes that higher immigration is contributing to a bigger workforce, boosting economic growth and increasing revenue by about $1 trillion over a decade. CBO expects a surge in immigration to last through 2026, and projects that the labor force will have 5.2 million more people in 2033 compared to the agency’s projections last year.

The economy “grew strongly” in 2023, compared with the previous year, CBO notes. The budget office also said inflation should continue slowing this year, in line with the Federal Reserve’s long-run goal of 2 percent, while the central bank is expected to reduce interest rates in the coming months. Inflation then “ticks up” slightly in 2025, the budget office predicts, before falling slightly.

Jennifer Scholtes contributed to this report.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Enter Your Information Below To Receive Latest News, And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Editor's Pick

    Enhancing and Broadening Managed Connectivity Solutions Across the Americas. OptConnect, a longtime leader in managed wireless services, today announced it has acquired Latin America-based...


    Honda said on Tuesday it was recalling 750,000 vehicles in the United States over a defect involving air bags which could deploy unintentionally during...

    Editor's Pick

    CSL, Critical IoT Connectivity experts, announce the launch of CSL Satellite. CSL Satellite provides Critical Connectivity to remote or challenging environments, where mobile or...


    Cruise, the driverless car company owned by General Motors is back in the spotlight after another close call with a pedestrian. The California DMV...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024