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CBO: Deficit Could Hit $7T By 2024

budget analysis reviewThe Congressional Budget Office has released its 2014 long-term budget outlook that forecasts federal budget deficits between fiscal years 2015 and 2024 to reach a total of nearly $7.6 trillion.

The U.S. could also run into a fiscal crisis if it fails to control a growing federal debt, CBO said Tuesday.

Federal debt held by the public for fiscal 2014 could amount to $492 billion, or 2.8 percent of gross domestic product, and 74 percent of GDP over the next five under current laws.

CBO estimates the deficit for current fiscal year as at 3 percent of GDP, compared to 10 percent in 2009, due to economic recovery from the recession in 2009 and changes to tax and spending laws.

CBO expectsdeficits to remain between 2.5 percent and 3 percent of GDP from 2015 to 2018 if current laws on taxes and spending remain unchanged.

Federal debt held by the public could climb to 106 percent by 2039 if current laws remain the same, CBO says.

CBO also warned of an “unsustainable” economy if federal debt follows an upward path relative to the GDP and projects debt held by the public to surpass 100 percent of GDP.

The agency projects that federal spending on Social Security, Medicare and Medicaid will account for 14 percent of GDP by 2039.

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