Analysis of CBO’s 2020 Long-Term Budget Outlook - September 21, 2020

2 Debt Will Nearly Double the Size of the Economy By 2050 CBO projects debt held by the public will rise from over 79 percent of the economy in 2019 and 98 percent by the end of 2020 to 195 perce. [...] CBO’s 2050 deficit projection of 12.6 percent of GDP would be higher than any time in modern history outside of World War II and the COVID-19 economic crisis, and is over four times the 50- year average of 3 percent of GDP. [...] CBO projects spending will grow from 21.0 percent of GDP in 2019 to 31.2 percent of GDP by 2050 while revenue will grow from 16.3 percent to 18.6 percent of GDP. [...] CBO projects spending on Social Security and the major health care programs will rise from 10.2 percent of GDP in 2019 to 15.5 percent in 2050 while interest on the debt will grow from 1.8 percent of GDP in 2019 to 8.1 percent in 2050 (interest costs will actually be below 2019 levels through 2028 as a result of very low interest rates). [...] 4: Changes in CBO’s 2049 Current Law Debt Projection Since 2019 2019 Projection of Debt to GDP in 2049 144 percent of GDP COVID Relief Legislation +10 percent of GDP Bipartisan Budget Act of 2019 +16 percent of GDP Repeal of health-related taxes +10 percent of GDP Reduction in projected nominal GDP +10 percent of GDP Other Changes and Interactions -1 percent of GDP 2020 Projection of Debt to GDP i.