Current:Home > FinanceCongressional Budget Office raises this year’s federal budget deficit projection by $400 billion -Excel Wealth Summit
Congressional Budget Office raises this year’s federal budget deficit projection by $400 billion
SafeX Pro Exchange View
Date:2025-04-11 06:11:57
WASHINGTON (AP) — The Congressional Budget Office said Tuesday that it projects this year’s federal budget deficit to be $400 billion higher, a 27% increase compared to its original estimate released in February.
The major drivers of the change include: higher costs from the supplemental spending package signed in April that provides military aid to Ukraine and Israel; higher than estimated costs of reducing student loan borrower balances; increased Medicaid spending; and higher spending on FDIC insurance after the agency has not yet recovered payments it made after the banking crises of 2023and 2024.
The report also projects that the nation’s publicly held debt is set to increase from 99% of gross domestic product at the end of 2024 to 122% of GDP — the highest level ever recorded — by the end of 2034. “Then it continues to rise,” the report states.
Deficits are a problem for lawmakers in the coming years because of the burden of servicing the total debt load, an aging population that pushes up the total cost of Social Security and Medicare and rising health care expenses.
The report cuts into President Joe Biden’s claim that he has lowered deficits, as borrowing increased in 2023 and is slated to climb again this year.
The White House budget proposal released in March claims to reduce the deficit by roughly $3 trillion over the next 10 years and would raise tax revenues by a total of $4.9 trillion in the same period.
White House spokeswoman Karine Jean-Pierre, said in a statement that the report “is further evidence of the need for Congress to pass President Biden’s Budget to reduce the deficit by $3 trillion — instead of blowing up the debt with $5 trillion of more Trump tax cuts.”
A May CBO report estimates that extending the provisions of Trump’s Tax Cuts and Jobs Act would increase deficits by nearly $5 trillion into 2034.
Trump, as a candidate for president in 2024, recently told a group of CEOs that he would further cut the corporate tax rate he lowered while in office, among other things. The Committee for a Responsible Federal Budget estimates that the 10-year cost of the legislation and executive actions former President Donald Trump signed into law was about $8.4 trillion, with interest.
In a statement, House Budget Committee Chairman Jodey Arrington, R-Texas, responded to the increased deficit forecast by saying that “Congress must reverse the spending curse of the Biden Administration by undoing expensive and overreaching executive actions.”
Arrington added that “we must address the most significant debt drivers of our mandatory spending,” a category in the budget that includes Social Security and Medicare.
Michael A. Peterson, CEO of the Peter G. Peterson Foundation, said the CBO projections show that the outlook for America’s critical national debt challenge is worsening.
“The harmful effects of higher interest rates fueling higher interest costs on a huge existing debt load are continuing, and leading to additional borrowing. It’s the definition of unsustainable,” Peterson said.
“The leaders we elect this fall will face a series of highly consequential fiscal deadlines next year, including the reinstatement of the debt limit, the expiration of the 2017 tax cuts and key decisions on healthcare subsidies, discretionary spending caps and more.”
veryGood! (8132)
Related
- Realtor group picks top 10 housing hot spots for 2025: Did your city make the list?
- About 1 in 10 young adults are vaping regularly, CDC report finds
- Activists Deplore the Human Toll and Environmental Devastation from Russia’s Unprovoked War of Aggression in Ukraine
- Get a Mess-Free Tan and Save $21 on the Isle of Paradise Glow Clear Self-Tanning Mousse
- See you latte: Starbucks plans to cut 30% of its menu
- Illinois Solar Companies Say They Are ‘Held Hostage’ by Statehouse Gridlock
- Four key takeaways from McDonald's layoffs
- Big Agriculture and the Farm Bureau Help Lead a Charge Against SEC Rules Aimed at Corporate Climate Transparency
- Paula Abdul settles lawsuit with former 'So You Think You Can Dance' co
- Inside Clean Energy: A Geothermal Energy Boom May Be Coming, and Ex-Oil Workers Are Leading the Way
Ranking
- What do we know about the mysterious drones reported flying over New Jersey?
- Corn-Based Ethanol May Be Worse For the Climate Than Gasoline, a New Study Finds
- Margot Robbie Channels OG Barbie With Sexy Vintage Look
- Taylor Swift, Keke Palmer, Austin Butler and More Invited to Join the Oscars’ Prestigious Academy
- Whoopi Goldberg is delightfully vile as Miss Hannigan in ‘Annie’ stage return
- Rural Pennsylvanians Set to Vote for GOP Candidates Who Support the Natural Gas Industry
- The EPA Wants Millions More EVs On The Road. Should You Buy One?
- Climate Change Poses a Huge Threat to Railroads. Environmental Engineers Have Ideas for How to Combat That
Recommendation
How to watch new prequel series 'Dexter: Original Sin': Premiere date, cast, streaming
Child's body confirmed by family as Mattie Sheils, who had been swept away in a Philadelphia river
New Mexico Could Be the Fourth State to Add a Green Amendment to Its Constitution, But Time Is Short
UPS workers poised for biggest U.S. strike in 60 years. Here's what to know.
Trump's 'stop
Inside Clean Energy: Drought is Causing U.S. Hydropower to Have a Rough Year. Is This a Sign of a Long-Term Shift?
Is a State Program to Foster Sustainable Farming Leaving Out Small-Scale Growers and Farmers of Color?
The Fed's radical new bank band-aid