February 06, 2024
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CBO 2024 Baseline: Reading the Fiscal Tea Leaves
Deficits Running Higher than CBO last Projected:
- The baseline details the Congressional Budget Office’s (CBO) projections for spending, revenue, deficits, debt, the economy, and specific federal programs and policies for the ensuing 10-year budgetary window.
- To that end, on February 7, 2024, CBO will publish its newest projections, “The Budget and Economic Outlook: 2024 to 2034.”
- CBO published its last update to the federal budget outlook nine months ago in May 2023. The report projected 10-year deficits of $20 trillion.
- In the intervening nine months, CBO has published monthly budget reviews, which generally show the deficit for fiscal years 2023 and 2024 to be higher than previously projected.
FY 2023 Deficit: 32 Percent Higher Than Projected:
- In May 2023, CBO projected the FY 2023 deficit to be $1.5 trillion. The actual FY 2023 deficit was $2 trillion (after accounting for the Administration’s student loan cancellations), a difference of $489 billion or 32 percent.
- Spending increases of note:
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- Medicare spending was $844 billion, $18 billion or 2.2 percent higher than projected.
- Medicaid spending was $616 billion, $22 billion or 3.7 percent higher than projected.
- Federal Deposit Insurance Corporation (FDIC) spending was $92 billion, $7o billion or 318.2 percent higher than projected.
FY 2024 Deficit: Running 21 Percent Higher than Last Year:
- In May 2023, CBO projected the FY 2024 deficit to be $1.6 trillion.
- However, in CBO’s monthly budget reports, the deficit so far in FY 2024 is up by $94 billion or 21 percentcompared to last year.
- Spending increases of note:
- Net interest payments were projected to increase by 12.4 percent from 2023 to 2024. Compared to this point last year, they are 49 percent higher.
- Medicare spending was projected to increase by 0.2 percent from 2023 to 2024. Compared to this point last year, it is 13 percent higher.
- Medicaid spending was projected to decline by 9.4 percent from 2023 to 2024. Compared to this point last year, it is 0.2 percent higher.
- FDIC spending was projected to be negative this year. So far FDIC spending is $59 billion.
*Year-to-date represents the first three months of program spending in 2023 versus the first three months of program spending in 2024
