The Coronavirus Aid, Relief, and Economic Security Act signed into law in March will increase federal deficits by about $1.8 trillion over 10 years, the Congressional Budget Office said Thursday. Most of the deficit increase will come this year.
In a letter to Senate Budget Committee Chair Mike Enzi, the CBO said the legislation would generate the following changes in the period between 2020 and 2030:
- A $988 billion increase in mandatory outlays;
- A $446 billion decrease in revenues;
- A $326 billion increase in discretionary outlays, stemming from emergency supplemental appropriations.
The CBO noted that while the aid package includes more than $2 trillion worth of financial assistance, some of that comes in the form of loan guarantees, which will not affect the budget.
According to Katia Dmitrieva of Bloomberg News, the CBO analysis implies growth in the federal budget deficit of about $1.6 trillion in the 2020 fiscal year.
“While the CBO didn’t give updated projections for the deficit in the 12 months through September, based on pre-virus projections for a $1 trillion deficit the new gap would likely be equivalent to more than 10% of gross domestic product,” Dmitrieva said. “That would make it the biggest by that measure since World War II as well as a record in dollar terms.”