Last week, the Congressional Budget Office (CBO) released its updated Budget and Economic Outlook, which provides their latest baseline projections for the coming decade. Under current law, CBO estimates debt to rise from about 60 percent of GDP currently, to nearly 70 percent by 2020. However, this current law baseline assumes that a number of current policies scheduled to expire under current law will actually do so, a highly unlikely scenario. Absent policy change,  the debt is likely to grow far more quickly  

CRFB’s Realistic Baseline aims to offer a more probable fiscal outlook for both the medium- and long-term.

CBO’s Updated Baseline Projections

Under current law, CBO now expects the deficit to reach $1.34 trillion (9.1 percent of GDP) this year, as opposed to the $1.37 trillion (9.4 percent of GDP) projected in March. Though the deficit will be smaller this year than previously projected, larger outlays for discretionary programs (mostly in defense), unemployment insurance, interest payments, and spending on mandatory programs will push cumulative deficits over the next ten years higher than was previously projected. Cumulative deficits over the coming decade are now expected to reach $6.25 trillion (3.3 percent of GDP), compared to the $5.99 trillion (3.2 percent of GDP) projected in March.

The full PDF of this policy paper can be downloaded at the right. You can also view this policy paper on CRFB.org.