The 2020 Long-Term Budget Outlook

To reflect recent trends, CBO currently projects that mortality rates for working-age adults decline in the near term at a slower rate than the agency previously projected. For most people age 55 or older, CBO then revises those projections upward for 2020 and 2021 to reflect the greater number of fatalities from the pandemic in that age group. After 2021, CBO expects mortality rates to decline at roughly the average rate each age group experienced between 1950 and 2017. That rate of mortality improvement is generally lower than CBO projected last year because of the incorporation of two additional years of higher-than-expected mortality rates.

CBO’s projections of mortality rates affect the agency’s projections of life expectancy. Compared with last year’s projections, mortality rates are declining more slowly for people age 65 or younger (especially for those younger than age 45). As a result, life expectancy at birth is projected to be 82.0 years in 2050, whereas CBO projected last year that it would be 82.6 years. Life expectancy at age 65 is projected to be 21.6 years in 2050, unchanged from last year’s projection.

Contributions of Demographic Factors to Population Growth

The combination of the three demographic factors described above—fertility, immigration, and mortality—determine CBO’s projections of total population growth. Over the course of the next decade, immigration accounts for about half of the overall increase in the size of the population, and changes in fertility and mortality account for the other half (see Table A-1[34]). With fertility rates expected to remain below the replacement rate, immigration becomes an increasingly important part of overall population growth in the United States. By 2050, in CBO’s projections, nearly all of the nation’s population growth is driven by net immigration (see Figure A-2[35]).

Table A-1.

Average Annual Values for Demographic Variables That Underlie CBO’s Extended Baseline Projections

Source: Congressional Budget Office.

The extended baseline projections, which generally reflect current law, follow CBO’s 10-year baseline budget projections and then extend most of the concepts underlying those projections for the rest of the long-term projection period.

a. The civilian noninstitutionalized population includes individuals age 16 or older who are not inmates of institutions or on active duty in the armed forces.

b. Life expectancy as used here is period life expectancy, which is the amount of time that a person in a given year would expect to survive beyond his or her current age on the basis of that year’s mortality rates for various ages.

Figure A-2.

Demographic Factors That Contribute to Population Growth

Percent

As fertility rates remain below the replacement rate—the rate required for a generation to exactly replace itself— immigration plays an increasingly important part in population growth. By 2050, nearly all of that growth is driven by immigration.

Sources: Congressional Budget Office; Social Security Administration.

Net immigration is a measure of all people who either enter or leave the United States in any year.

Economic Factors

The federal government’s revenues, spending, and debt depend on economic factors such as the growth of gross domestic product (GDP), the size and composition of the labor force, the number of hours worked, the distribution of earnings among workers, capital accumulation, productivity, inflation, and interest rates. CBO’s projections of those factors reflect the agency’s assessment of various economic and demographic developments, as well as the effects of fiscal policy on economic activity.

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