The Congressional Budget Office (CBO) regularly publishes reports that present projections of what federal deficits, debt, revenues, and spending would be for the current year and for the following 10 years and beyond if existing laws governing taxes and spending generally remained unchanged.
CBO released its most current report this week in which it projects a federal budget deficit of $1.02T in 2020 and averages $1.3T between 2021 and 2030. Projected deficits rise from 4.6% of GDP in 2020 to 5.4% of GDP in 2030. Over the past century, the deficit has not exceeded 4.0% of GDP for more than five consecutive years except for a six-year period during and after World War II. Over the past 50 years, deficits have averaged around 1.5% of GDP when the economy is relatively strong (as it is now). Because of the large deficits, federal debt held by the public is projected to grow, from 81% of GDP in 2020 to 98% in 2030. The report assumed that lawmakers will allow the 2017 tax cuts to expire, which means that in reality the deficit may be worse than projected if Congress extends the cuts, further reducing revenue.
The good news is that the economy is doing well and, in 2020, inflation-adjusted GDP is projected to grow by 2.2%. After 2020, economic growth is projected to slow. From 2021 to 2030, output is projected to grow at an average annual rate of 1.7%. That average growth rate of output is less than its long-term historical average, primarily because the labor force is expected to grow more slowly than it has in the past.
CBO Budget and Economic Outlook: 2020 to 2030
CBO Press Briefing