The U.S. federal budget deficit is on track to exceed $3.8 trillion this year even if Congress doesn’t enact any more stimulus spending, and the nation’s debt will rise to levels not seen since the country emerged from World War II, a non-partisan budget watchdog estimated Monday.
The projection by the Committee for a Responsible Federal Budget would put the shortfall between revenue and spending at nearly four times the $984 billion deficit for fiscal 2019. That represents 18.7% of the economy, the highest since 1945. By the Oct. 1 start of fiscal 2021, the group projects the U.S. debt held by the public will be greater than the size of the $21 trillion U.S. economy and will exceed the record set after the war by 2023.
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The group warns that its estimates may be on the low side.
The committee assumes real GDP will shrink by 3.9% from fiscal 2019 to 2020 and rise by 3.2% from fiscal 2020 to fiscal 2021. It also assumes Congress enacts no more stimulus legislation beyond the three emergency aid packages that it has already passed, including the $2.2 trillion measure enacted late last month.
It estimates debt held by the public will be $20.61 trillion on Oct. 1 compared with nominal GDP of $20.583 trillion. The group sees the deficit narrowing to $2.1 trillion in 2021 and then staying at about $1.3 trillion per year through 2025.
Democrats in Congress are already advocating billions more in spending to address the crisis. Republican leaders in Congress argue most previously enacted programs — with the exception of the Paycheck Protection Program aimed at small businesses — should be evaluated before any more funding is given.