On May 2, 2019, the Congressional Budget Office (CBO) released updated budget projections for the 2020 to 2029 budget window. These projections update the CBO's January 2019 budget projections for recent legislation and data on federal government spending and tax receipts, but reflect the same macroeconomic forecast (see Tax Alert 2019-0240).

• As seen in the figure below, the CBO projects that federal deficits will increase from $892 billion in 2020 to more than $1.3 trillion in 2029 and total $11.4 trillion over the 2020 to 2029 10-year budget window.
• In relation to the size of the US economy (measured by gross domestic product), the deficit is estimated to rise from 4.0% in 2020 to 4.2% in 2029, or 4.3% over the 10-year budget window.
• The 10-year deficit is projected to be $249 billion below the CBO's January 2019 estimate due to lower outlays ($333 billion) and lower receipts ($84 billion).

The rise in the deficit over the 10-year budget window reflects the faster projected growth in federal government spending (from $4.6 trillion to $7.0 trillion) over revenue (from $3.7 trillion to $5.7 trillion). Over the next several decades, deficits are projected to continue to increase due primarily to the rise in federal government spending on Social Security, health care, and interest on the government debt.

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