Washington, D.C.– The Congressional Budget Office outlook released today shows that the new administration is inheriting an economy that is chugging along at a decent clip, but one that faces an ominous fiscal outlook, Shai Akabas, director of fiscal policy at the Bipartisan Policy Center, said.
“As the president and Congress make decisions on policy priorities, it is important that they don’t let down their guard on how those decisions can affect budget deficits and the economy for future generations,” Akabas said.
The gap between spending and revenues is set to grow quickly with no end in sight.
At $559 billion, the deficit projected for Fiscal Year 2017 is slightly lower than the prior year, but still substantial. The real problem, however, is on the horizon. The CBO report projects that if current laws remain unchanged, the deficit will increase rapidly after next year. By the end of the projection window, 15 cents out of every dollar paid in taxes will be needed just to cover interest costs on the debt.
“Driven by changes in demographics and rising interest rates, the gap between spending and revenues is set to grow quickly with no end in sight. This is just the tip of the iceberg,” Akabas said.