A new report by the Congressional Budget Office projects the majority of new debt for the federal government will be the result of spending, not the Trump tax cuts signed into law the previous year. With total outstanding debt estimated at over $21 trillion and a 10-year projected average of $900 billion in budgetary deficits, it is clear no plans are being made to manage this burden.
Though there was a small, and undeniable, decrease in overall revenue for the previous year, it did not deviate far from the 50-year norm. In the 10-year projection for revenue, we maintain the running average of 17.4% of GDP in federal tax revenue. We’re expected to go above average as early as 2025.
As far as spending is concerned, the next 10 years are all expected to surpass the running 50-year average of 20.3% of GDP in federal spending. The average deficit for the next 10-years is predicted to be a relatively consistent 4.4% of GDP. Spending will hit a peak of 23% of GDP in 2028. Using the CBO’s 2% growth estimates, our federal budget will be $5.6 trillion in 2029, with a budget deficit of $1.1 trillion. All assuming no recessions and no major new programs.
The two largest sources of spending increases come from Mandatory spendings, such as Social Security and Medicaid, and interest on the debt. Discretionary spending, as a result, is projected to decrease slightly, but not enough to offset other increases.
This does not take into account the several high-cost democratic programs being proposed by 2020 hopefuls. If the Democrats were to take the Presidency and the Senate, spending will surely skyrocket.