The bleak figures come after an explosion in federal spending amid the coronavirus pandemic designed to bolster the economy and shield millions of American workers from financial ruin.
The U.S. government budget deficit will triple this year to $3.3 trillion, soaring to the largest percentage of gross domestic product since 1945, the Congressional Budget Office projected on Wednesday.
As a result, federal debt held by the public will hit 98 percent of GDP in fiscal 2020, which ends on Sept. 30, and exceed the size of the economy by 2021, the CBO reported in updated projections.
The deficit-to-GDP ratio of 16 percent in 2020 comes after an explosion in federal spending amid the coronavirus pandemic designed to bolster the economy and shield millions of American workers from financial ruin. The bleak figures also reflect a massive drop-off in economic growth this year as a consequence of the virus.
The rising debt levels also mean that trust funds for federal entitlement programs are expected to run dry faster than previously estimated. If Congress doesn’t change spending or policy to fix the imbalance, three trust funds will be depleted within the next 10 years, the CBO said: the Highway Trust Fund in fiscal 2021; the Medicare Hospital Insurance Trust Fund in fiscal 2024; and the Social Security Disability Trust fund in fiscal 2026.