The Congressional Budget Office lowered its growth expectations and concluded the federal deficit could grow by $544 billion in fiscal year 2016, according to the updated summary of its annual budget and economic outlook released Tuesday.
While the nonpartisan scorekeeper initially projected 3.1 percent growth this year, it dropped the number down to 2.7 percent. The GDP is projected to grow at an even slower rate in coming years – 2.5 percent in 2017, and a lackluster average rate of 2.0 percent from 2018 through 2020.
“In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009,” the report reads. “If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years.”
The increase to the deficit is $130 billion higher than the CBO’s estimates last year.
The agency said it anticipates mandatory outlays to increase by $168 billion from fiscal year 2015 – largely because of spending increases on entitlements like Social Security, which will go up by 3 percent; and Medicaid, Medicare, CHIP and Obamacare subsides which will increase by 11 percent or $104 billion.
GOP lawmakers in both the House and Senate said projections are unacceptable.
“After eight years of failed fiscal policies and wasteful and unaccountable spending, America is faced with a surging national debt that totals almost $19 trillion and a weak economy that is holding back hardworking American families,” said Senate Budget Committee Chairman Mike Enzi. “We didn’t get here overnight – and we will not fix it overnight. It is time to put our fiscal books in order, in a balanced, responsible way, which is what the American people want and deserve.”
House Ways and Means Committee Chairman Kevin Brady said policy changes need to be made to fix the economy and get the country back to work, saying the president’s recovery plan has been “anemic” and shouldn’t be accepted.
“While President Obama continues to tell a rosy story about the economy, this report from Congress’ nonpartisan budget experts paints a much different picture. Unless we change course, Americans’ paychecks
The full report is poised to be released Jan. 25 and the Senate Budget Committee will hold a hearing on the issue Jan. 26.
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