What’s going on in Washington…

In short, the Congressional Budget Office updated the budget and economic projections for the next ten years and also updated the debt ceiling forecast.  Here are some of the highlights.

  • The federal budget deficit for fiscal 2015 is projected to total $426 billion, according to this reportby the Congressional Budget Office (CBO).
  • The latest deficit projection, which is $59 billion below the fiscal 2014 budget shortfall, is $60 billion lower than CBO’s previous fiscal 2015 deficit projection in March.
  • Spending is still expected to outpace revenues for the year.  Spending to increase by 5%, amounting to $3.7 trillion, while revenues are estimated to rise 8 percent to $3.3 trillion.
  • Spending for Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies for health insurance purchased through exchanges are expected to be $110 billion, or 12 percent, higher this year compared to 2014.
  • CBO projects that real GDP growth will grow by 2 percent this calendar year, by 3.1 percent in 2016, and by 2.7 percent in 2017.
  •  The CBO also released its latest projection on the debt limit (or debt ceiling), the maximum amount of debt that the Department of Treasury can issue to the public and to other public agencies. In March, the debt ceiling was reached and the Secretary of the Treasury announced a series of “extraordinary measures” to avoid breaching the debt ceiling. The CBO projects that if the debt limit remains unchanged, the Treasury will exhaust those “extraordinary measures” and run out of cash between mid-November and early December.

 

Sarah Curry

Sarah Curry is Director of Fiscal Policy Studies at the John Locke Foundation.

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