The non-partisan Congressional Budget Office (CBO) release an update to its 10-year budget and economic outlook projections. CBO estimates that the U.S. federal deficit is forecasted to be $960B in FY2019 and will reach $1 trillion for the 2020 fiscal year. The estimate for FY2019 is $63B or 7% above the estimate CBO released three months ago. Over the 2020 to 2029 period, projected annual deficits will equal $12.2T, or $800B more than projected in May. This is an average of $1.2T per year, or 4.7% of gross domestic product (GDP). In 2018, debt held by the public reached 78% of GDP. By 2029, the national debt is projected to grow to 95% of GDP – its highest level since immediately after WWII.
The increase in the deficit comes mostly from the higher discretionary funding limits for FY2020 and FY2021 in the Bipartisan Budget Act of 2019. An anticipated reduction in interest rates provides some relief as it lowered projections of net interest outlays by $1.4 trillion (including interest savings from the resulting reductions in deficits and debt).
CBO “An Update to the Budget and Economic Outlook: 2019 to 2029”