The 2020 Long-Term Budget Outlook

From 2022 to 2028, other mandatory spending as a share of GDP in the current projections remains higher than projected last year; thereafter, it is roughly the same as it was in last year’s projections. From 2022 to 2049, other mandatory spending as a percentage of GDP in CBO’s current projections is less than 0.1 percentage point higher, on average, than projected last year.12 That small change was the cumulative result of several updates that CBO made to its projections for legislative, economic, and technical reasons.

Discretionary Spending. In CBO’s current projections, discretionary spending is 8.0 percent of GDP in 2020 and 7.6 percent in 2021—2.2 percentage points and 1.9 percentage points higher, respectively, than it was in those years in last year’s projections. That upward revision reflects policies enacted in response to the pandemic and related economic downturn. In accordance with section 257 of the Deficit Control Act, CBO projects budget authority over the next 10 years by applying the specified inflation rate to the most recent appropriations for discretionary accounts. However, because of the unusual size and nature of the emergency funding provided in recently enacted legislation, CBO, after consulting with the budget committees, deviated from the standard procedures for constructing its baseline and did not extrapolate the discretionary budget authority provided by the laws enacted in response to the pandemic after March 6, 2020.13

CBO also boosted its projections of discretionary spending as a share of GDP after 2021. Whereas last year the agency projected discretionary spending would equal 5.5 percent of GDP in 2022 and 4.9 percent in 2030, it now projects such spending to equal 6.9 percent of GDP in 2022 and 5.8 percent in 2030. That upward revision results primarily from the increases in the caps on discretionary funding in 2020 and 2021 that were put in place by the Bipartisan Budget Act of 2019. The higher 2021 caps were used to extrapolate the projected path of discretionary spending in the extended baseline.

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