On Tuesday, the Congressional Budget Office (CBO), the non-partisan accounting arm for Congress, issued its Budget and Economic Outlook for 2016 to 2026. Key findings included that this year, 2016, the federal budget deficit (as opposed to debt which is essentially all the deficits added together) will increase, in relation to the size of the economy, for the first time since 2009. Although the deficits since then have certainly not been small. The deficit in 2009, thanks to dwindling recession-related tax revenues and the much vaunted stimulus, hit $1.4 trillion. The deficit declined in the following years but the CBO has said those years were the largest budget deficits in comparison to the economy since 1946.
The CBO projects that if laws remain unchanged, the deficit would grow over the next ten years and by 2026 “it would be considerably larger than its average over the past 50 years.” The 2016 deficit is estimated to be $544 billion, $105 billion more than last year. The CBO’s previous estimate for this year’s deficit, made in August, was $415 billion. The increase since then is largely due to the extension of some corporate and income tax provisions.
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