The U.S. is likely to add $19 trillion more to the national debt in the next 10 years, which is $3 trillion higher than previously expected, new Congressional Budget Office (CBO) predictions show.
By the end of 2023, the CBO projects the deficit to be $1.4 trillion, and it will continue to average about $2 trillion annually, raising the debt to about $52 trillion. The CBO report indicates that the rise in the deficit is a result of bipartisan legislation coupled with the Federal Reserve’s hike in interest rates.
“The cumulative deficit over the 2023–2032 period that we now project is $3 trillion larger than we projected last May, mainly because of newly enacted legislation and changes to the economic forecast that boost interest costs and spending on mandatory programs,” Phillip L. Swagel, the director of the budget office, said in a statement included with the report.
In CBO’s projections, the federal deficit totals $1.4 trillion in 2023 and averages $2.0 trillion per year from 2024 to 2033. Real GDP growth comes to a halt in 2023 and then rebounds, averaging 2.4 percent from 2024 to 2027. https://t.co/v5s8v4H1PU
— U.S. CBO (@USCBO) February 15, 2023
These projections are likely to prompt more debate between the Biden administration and House Republicans over finances and the debt ceiling.
House Speaker Kevin McCarthy is pushing President Joe Biden to lower spending in exchange for a debt-ceiling increase. If they can’t come to a compromise, the Treasury could run dry as early as July, according to Swagel. (RELATED: US Hits Debt Ceiling As Treasury Department Prepares ‘Extraordinary’ Measures To Avoid Default)
“If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government would be unable to pay its obligations fully. As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both,” Swagel said.
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