A new Congressional Budget Office report predicts the budget deficit to hit $426 billion, a figure $60 billion lower than the agency’s most recent shortfall estimates in March and $59 billion down from the previous fiscal year.
CBO said Tuesday it reduced its budget deficit projection for 2015 due to higher-than-anticipated receipts from corporate and individual income taxes.
Public debt is expected to reach 74 percent of gross domestic product by year-end, according to the report.
The agency expects federal outlays to grow by 5 percent to $3.7 trillion this year and projects outlays for Medicaid, Medicare, Children’s Health Insurance Program and other health plans to climb by 12 percent this year.
CBO also expects an 8 percent increase in federal revenues for fiscal year 2015.
The budget shortfall will drop to $414 billion in fiscal year 2016 and then climb significantly to reach $1 trillion by fiscal 2025, CBO said.