Keith Hall, director of the Congressional Budget Office, told House Budget Committee members Thursday the agency has forecast the U.S. deficit will grow over the next 10 fiscal years if the current government spending authority and a package of tax cut extensions remain unchanged.
Hall said in a written testimony CBO projects a cumulative 10-year federal deficit of $8.5 trillion, about $1.5 trillion more than the projection the agency made six months ago.
“Half of that increase stems from the effects of laws enacted since August — especially the extension of tax provisions that reduce corporate and individual income taxes,” he told the committee.
“About 30 percent of the increase is caused by changes in the economic forecast.”
“The remainder of the increase is primarily in our estimates of outlays.”
He noted that overall federal spending is projected to increase by $2.5 trillion from fiscal 2016 to fiscal 2026 and nearly half of that increase will be driven by Social Security and Medicare investments.
CBO also forecasts government revenues will remain stable relative to the size of U.S. economy in the next 10 fiscal years, Hall added.