On August 21, 2019, the Congressional Budget Office (CBO) released updated budget and economic projections for the 2020 to 2029 budget window. These projections update the CBO's May 2019 budget and economic projections for: (1) recent legislation, (2) data on federal government spending and tax receipts, and (3) economic developments.

• As seen in the figure below, the CBO projects that federal deficits will increase from $1.0 trillion in 2020 to nearly $1.4 trillion in 2029.
• In relation to the size of the US economy (measured by gross domestic product), the deficit is estimated to be 4.6% in 2020, 4.5% in 2029, and 4.7% over the 10-year budget window.
• The 10-year deficit is estimated to be $12.2 trillion — $809 billion above the CBO's May 2019 estimate — due to higher outlays ($360 billion) and lower receipts ($449 billion).

The rise in the deficit over the 10-year budget window reflects faster projected growth in federal government spending (from $4.6 trillion to $7.0 trillion) over revenue (from $3.6 trillion to $5.6 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 federal government debt.

The $809 billion increase in the 10-year deficit projection since May 2019 results from legislative changes ($1.9 trillion increase), economic changes ($1.4 billion decrease), and so-called technical changes ($250 billion increase) to the CBO's projection. Specifically, the CBO projects that the Bipartisan Budget Act of 2019 will increase the 10-year deficit by $1.7 trillion. This law increased discretionary funding limits for 2020 and 2021. Additionally, the CBO's projection assumes that the increased funding in 2021 will continue and grow at the rate of inflation.

The CBO also projects that the supplemental appropriations for disaster relief and border security will increase the 10-year deficit by $255 billion. Although the supplemental appropriations are for 2019, the CBO's projection assumes that they will continue through the 10-year budget window and grow at the rate of inflation.

Additionally, the CBO projects that its downward revision to its interest rate forecast — which reduces interest costs — will reduce the 10-year deficit by $1.4 trillion.

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