CBO Projects Worsening Deficit Condition
In its latest long-term projections of spending, revenues and deficits released last week, the Congressional Budget Office (CBO) increased its estimates of cumulative deficits by $1 trillion through 2023. According to CBO, deficits initially will continue to decline over the next two years before growing again later in the decade, due largely to lowered expectations of GDP growth. Discretionary spending, which contains virtually all federal R&D, is expected to fall significantly as a share of the economy, to 5.2 percent in 2024, well below historical norms. This decline is due primarily to the discretionary spending caps put in place by the Budget Control Act.