Congressional Budget Office projects a $400 billion increase in this year’s federal deficit
The Congressional Budget Office said Tuesday that it projects a federal budget deficit increase of $400 billion or 27% this year, from its last budget outlook released in February
WASHINGTON (AP) — The Congressional Budget Office said Tuesday that it projects a federal budget deficit increase of $400 billion or 27% this year, from the last budget outlook released in February.
The major drivers of the change are higher costs from the supplemental spending package signed in April that provides military aid to Ukraine and Israel; higher than estimated costs of reducing student loan borrower balances; increased Medicaid spending; and higher spending on FDIC insurance after the agency has not yet recovered payments it made after the banking crises of 2023 and 2024.
The report also projects that the nation’s publicly held debt is set to increase from 99% of gross domestic product at the end of 2024 to 122% of GDP — the highest level ever recorded — by the end of 2034. “Then it continues to rise,” the report states.
Deficits are a problem for lawmakers in the years to come because of the burden of servicing the total debt load, an aging population that pushes up the total cost of Social Security and Medicare and rising health care expenses.
