The Congressional Budget Office forecasts the U.S. budget deficit to reach $544 billion in fiscal 2016, about $105 billion more than fiscal 2015’s shortfall, Bloomberg reported Wednesday.
Andrew Mayeda writes CBO said in a budget and economic outlook report Tuesday the projected 2016 deficit increase will be driven by massive spending and tax bills that were passed and enacted after August last year.
“If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years,” CBOÂ added.
CBO pointed to a $1.1 trillion defense and domestic spending package and approximately $680 billion in tax relief for individuals and businesses over the next decade as the main drivers behind the expected rise in deficit, according to a separate report by The Fiscal Times’ Eric Pianin.
Pianin writes the agency also predicts a potential growth in interest on federal debt and healthcare and Social Security program investments will outpace government revenue growth through 2026.
David Lawder of Reuters reported CBO’s $544-billion shortfall estimation for this fiscal year is about $130 billion above the projection the agency made in August and amounts to 2.9 percent of gross domestic product, which will mark the highest level since 2009.