CBO: Budget Deficit to Fall to $468 Billion
The 2015 federal budget deficit is expected to be the lowest of any year during President Obama’s time in office, according to new projections from the Congressional Budget Office released Monday.
The nonpartisan CBO estimates the fiscal year 2015 budget deficit will be $468 billion, slightly lower than the $483 billion deficit from the previous year. The deficit is projected to be 2.6 percent of GDP, which is just slightly less than the average over the past half-century.
The CBO predicted that the economy would grow at a “solid pace” in 2015, which would lead to the unemployment rate dropping slightly and more people staying in the workforce.
Looking several years into the future, however, CBO projected deficits to start growing again after 2018, leading to increasing federal debt compared to the size of the economy. The agency predicted that debt would be nearly three-quarters the size of GDP, 74 percent, at the end of this fiscal year. That would be the highest in any year since 1950.
“Such large and growing federal debt would have serious negative consequences, including increasing federal spending for interest payments; restraining economic growth in the long term; giving policymakers less flexibility to respond to unexpected challenges; and eventually heightening the risk of a fiscal crisis,” the report said.
House Democratic Whip Steny Hoyer released a statement saying the CBO release showed progress in lowering deficits, but that the debt projections made clear there is still work to do.
"Since President Obama took office, deficits have been cut in half, and the deficit as a share of GDP has fallen significantly,” Hoyer said. “However, today's report shows how serious the problem of compounding interest on our debt really is and how much more Congress must do to address our long-term budget picture problem in a balanced and responsible way that does not put the burden on the most vulnerable Americans.”
The CBO projections also said that about 42 million people were uninsured in 2014, 12 million fewer than would have been if not for the Affordable Care Act. In 2015, the number of uninsured people was projected to fall to 36 million, or about 19 million fewer than would have been uninsured without Obamacare.