CBO: Federal Deficit Jumped 12% In First Two Months Of 2020 Fiscal Year
The federal deficit rose 12 percent to hit $342 billion in the first two months of the 2020 fiscal year, which began on October 1, according to the Congressional Budget Office.
The CBO projects that the deficit will blow past $1 trillion this year, calling the trajectory “unsustainable” and warning it will dampen economic growth and could make any future financial crises more severe.
In just two months, CBO estimated a $49 billion increase in spending, “largely due to increases in Social Security, Medicare, Medicaid, and the Defense Department.” Also a factor was an “increase in the cost of subsidizing education loans also contributed to the increased outlays.”
And while revenues increased as well, the CBO said it was only half as quickly as outlays, “rising $12 billion in comparison to last year and reaching $471 billion.”
Tax cuts have eaten into federal revenue while bipartisan agreements have increased spending. Nevertheless, Republicans continue calling for further tax cuts.