CBO Says Coronavirus Outbreak and Response Will Quadruple the Federal Deficit

April 24, 2020 by Dan McCue
The U.S. Capitol. Feb. 4, 2020. (Photo by Dan McCue)

WASHINGTON – Due to a combination of the passage of multiple economic stimulus bills and a deep recession caused by the coronavirus outbreak, the federal deficit for the 2020 fiscal year will quadruple to $3.7 trillion, the Congressional Budget Office said Friday.

In dizzying detail that officials cautioned was subject to “enormous uncertainty,” the nonpartisan office said it now expected the U.S. economy to shrink by 5.6 percent this year and for 2020 to end with an employment rate hovering near 12 percent.

The CBO said the numbers are largely the result of the near complete shutting down of the economy in the second quarter to slow the spread of the coronavirus, and that the recovery will begin as soon as this summer, as state and local governments ease stay-at-home orders, bans on public gatherings, and other measures restraining economic activity.

“After a sharp contraction in the second quarter, economic growth is expected to average about 17 percent at an annual rate in the second half of calendar year 2020,” the report says.

“Increases in consumer spending are expected to more than offset further declines in business investment during that period. In 2021, real GDP is projected to grow by 2.8 percent, on a fourth-quarter-to-fourth-quarter basis,” it said. 

According to the report, the four coronavirus relief bills signed by President Donald Trump this spring, will pile more than $2 trillion onto the $24.6 trillion national debt over the course of the remaining six months of the fiscal year.

That’s more than double the deficit record set during President Barack Obama’s first year in office, in the immediate aftermath of the global financial crisis.

Federal Budget

Once COVID is Slain, Sustainable Budgets Must Be Priority
Federal Budget
Once COVID is Slain, Sustainable Budgets Must Be Priority
March 5, 2021
by TWN Staff

WASHINGTON - A Congressional Budget Office report estimating that persistent budget deficits will cause the federal debt to double in size over the next 30 years, "provides a troubling snapshot of America’s fiscal outlook, which we know will only get worse from here," according to the... Read More

Reps Push Child Tax Credit Expansion But Watchdog Says 'Not So Fast'
Federal Budget
Reps Push Child Tax Credit Expansion But Watchdog Says 'Not So Fast'
February 9, 2021
by TWN Staff

WASHINGTON - House Democrats renewed their push to permanently expand and "improve" the Child Tax Credit, but a prominent fiscal watchdog warns that while the proposal deserves consideration, it must be fully paid for under the House PAYGO rules and not simply rolled into the next... Read More

Will Congress Revamp Reconciliation to Quickly Pass Biden COVID Relief Plan?
Congress
Will Congress Revamp Reconciliation to Quickly Pass Biden COVID Relief Plan?
January 26, 2021
by Dan McCue

WASHINGTON - It's the buzzword of everyone wanting to bypass GOP resistance and pass President Joe Biden's $1.9 trillion COVID-19 relief package, and it could upend decades of precedent when it comes to the federal budget process. The word is "reconciliation," and according to the Congressional... Read More

House Releases $2.3 Trillion Government Spending and Virus Relief Bill
Congress
House Releases $2.3 Trillion Government Spending and Virus Relief Bill
December 21, 2020
by Dan McCue

WASHINGTON — House Appropriations Committee Chairwoman Nita Lowey, D-N.Y., released the text of a $2.3 trillion omnibus spending bill Monday afternoon consisting of all 12 fiscal year 2021 appropriations bills, $900 billion coronavirus relief, and other authorizations. In addition to the COVID relief package, it includes... Read More

House Passes Stopgap Bill to Avoid Government Shutdown
Congress
House Passes Stopgap Bill to Avoid Government Shutdown
December 9, 2020
by Dan McCue

WASHINGTON - The House has passed a week-long stopgap bill to keep the government open through Dec. 18 so lawmakers can continue to negotiate both a longer-term spending package and coronavirus relief. The bill passed 343-67. If the stopgap measure hadn't been adopted, funding for the... Read More

Stopgap Readied Amid Year-End Budget, Virus Aid Scramble
Political News
Stopgap Readied Amid Year-End Budget, Virus Aid Scramble

WASHINGTON — Lawmakers were finalizing a one-week stopgap funding measure Tuesday to avoid a partial government shutdown starting Friday at midnight, with the only add-ons expected to be a package of expiring health care program extensions, according to Senate Appropriations Chairman Richard C. Shelby. The "clean" continuing resolution, as Shelby... Read More

News From The Well
scroll top