The 2020 Long-Term Budget Outlook

Changes in Projected Spending

In CBO’s extended baseline projections, noninterest spending as a percentage of GDP is higher than it was in last year’s projections, whereas net spending for interest is lower through 2033 and higher thereafter (see Figure B-2[40]).

Figure B-2.

CBO’s 2019 and 2020 Extended Baseline Projections of Outlays and Revenues

Percentage of Gross Domestic Product

Noninterest spending is now projected to be higher than it was projected to be last year.

CBO’s projections of net spending for interest on debt are lower than last year’s projections through 2033 and then higher through 2049.

Revenues are lower over the next three decades in this year’s projections than they were in last year’s. By 2049, the difference amounts to 0.9 percent of GDP.

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.

GDP = gross domestic product.

Noninterest Spending

In the near term, the increase in noninterest spending—that is, spending for Social Security and the major federal health care programs, other mandatory spending, and discretionary spending—as a percentage of GDP stems from the economic disruption caused by the pandemic and from the federal government’s response to it. In the long term, most of that increase stems from higher projections of discretionary spending.

Spending for Social Security. As a percentage of GDP, spending for Social Security in 2020 is now projected to be higher (5.3 percent of GDP) than it was projected to be last year (5.0 percent of GDP). The difference between the current and previous projections generally declines through 2027, is roughly zero for the next 15 years, and then increases again starting in 2043. In 2049, spending for Social Security is projected to equal 6.3 percent of GDP—0.2 percentage points higher than projected last year.

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