President Joe Biden just received a damning report from the Congressional Budget Office (CBO).
Citing the CBO’s latest report, the Washington Examiner reported Thursday that America’s federal deficit is expected to hit a whopping $3 trillion during the 2021 fiscal year.
In its report, the CBO predicts that the United States will spend $6.8 trillion during the 2021 fiscal year, while only earning $3.8 trillion. The result is a massive $3 trillion deficit, which is about $745 billion higher than an earlier projection made by the CBO for 2021.
If the CBO is correct in its budget prediction, then the 2021 fiscal year will see the second-largest federal deficit since 1945, CBS News reports.
The largest deficit was seen last year, as the economy buckled under the pressure of the COVID-19 pandemic. At that time, the deficit sat at $3.13 trillion, up from $1 trillion in 2019, as CBS notes.
In its report, the CBO wrote said the “economic disruption caused by the 2020–2021 coronavirus pandemic and the legislation enacted in response continue to weigh on the deficit.” This, of course, includes the bloated $1.9 trillion coronavirus spending package that President Joe Biden and congressional Democrats rammed through Congress — without the support of any Senate Republicans — earlier this year.
After the fiscal year 2021, the CBO projects the federal deficit will drop to $1.15 trillion in the fiscal year 2022 and then to $800 billion in the fiscal year 2023.
The CBO expects that the federal deficit will rise again in 2025, however.
According to the Examiner, CBO also projected in its latest report that the U.S. gross domestic product (GDP) would increase by 7.4% in the fiscal year 2021. It expects the five-year average annual growth of the country’s real GDP to be around 2.8%.
The CBO also says it expects the consumer price index to go up to 3.4% in the 2021 fiscal year. It will likely drop soon after, the office said.
In addition, the CBO projects the unemployment level for the 2021 fiscal year to hit 4.6%, before declining in years to come.
All-in-all, it appears that the 2021 fiscal year isn’t looking too good from an economic perspective. If President Biden doesn’t turn things around soon, we could be in for a long road to recovery ahead.