Federal Deficits to Grow More Than Expected Over Next Decade, CBO Says

CBO boosts 10-year forecasts for budget deficits by $809 billion, citing two-year budget deal.

Federal deficits are projected to grow much more than expected over the next decade after a budget agreement struck last month, pushing government debt as a share of the economy closer to the highest level since World War II, the Congressional Budget Office said.

The deal agreed upon by congressional leaders and the White House will add roughly $1.7 trillion to deficits between 2020 and 2029, assuming federal spending continues to rise by the rate of inflation beyond 2021.

Much of that increase will be offset by lower-than-expected interest rates, which will reduce the cost of servicing the government’s swelling debt by $1.4 trillion over the next decade, the CBO said in the updated budget projections.

Overall, the CBO said government debt as a share of the economy is expected to rise from 79% this year to 95% in 2029.

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