The 2020 Long-Term Budget Outlook


Appendix B: Changes in CBO’s Long-Term Budget Projections Since June 2019

Overview

The 30-year extended baseline projections for federal spending and revenues presented in this report differ from the projections that the Congressional Budget Office published in 2019 because of changes in law, the availability of more recent data, changes to the agency’s projections of demographic and economic factors, and other changes in assumptions and methods.1 The current extended baseline projections are consistent with the 2020–2030 economic forecast that CBO published in July 2020 and the 2020–2030 budget projections that the agency published in September 2020.2 The extended baseline projections presented in this report incorporate the budgetary and economic effects of the 2020 coronavirus pandemic and associated measures taken to limit in-­person interaction. They also reflect the economic and budgetary effects of laws enacted to address the public health emergency and to support households, businesses, and state and local governments.3

This appendix compares CBO’s current long-term budget projections with the projections the agency published in June 2019. Because most of last year’s projections ended in 2049, the appendix generally makes comparisons only through that year.

Measured as a percentage of gross domestic product (GDP), budget deficits and federal debt held by the public are currently projected to be significantly higher in the near term than CBO projected last year (see Figure B-1[38]).

Figure B-1.

CBO’s 2019 and 2020 Extended Baseline Projections of Deficits and Federal Debt Held by the Public

Percentage of Gross Domestic Product

Over the next three decades, deficits—both primary and total—are generally larger in this year’s projections than they were in last year’s. After large increases in total deficits in 2020 and 2021, the differences are relatively small for most of the rest of the decade, because net spending for interest is now projected to be lower through 2033.

Debt is also projected to be higher now. In the current projections, debt as a percentage of GDP in 2049 is 45 percentage points higher than it was in last year’s 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.

Primary deficits exclude net spending for interest.

GDP = gross domestic product.

Those increases stem from the economic disruption caused by the pandemic and from the federal government’s response to it. In the long term, budget deficits and federal debt held by the public are now projected to be higher, as a percentage of GDP, than CBO projected last year.

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