Over the coming decade, “CBO’s baseline estimates, which are predicated on the assumption that current law remains unchanged, show deficits falling markedly as a percentage of GDP over the next few years — to 3.2 percent by 2013. From 2014 through 2021, deficits under current law will range between 1.0 percent and 1.6 percent of GDP.”
Those projections assume that all the savings included in the deal to raise the debt ceiling come to pass, that the 2001 and 2003 tax cuts extended last year expire on schedule at the end of next year, and that cuts to Medicare physicians occur.
If the tax cuts were extended, the alternative minimum tax was indexed for inflation and cuts to Medicare’s payment rates for physicians’ services were prevented, then annual deficits from 2012 through 2021 would average 4.3 percent of GDP, compared with 1.8 percent in the CBO’s baseline projections, the budget office said.
Using economic data available through early July, when the agency initially completed its economic forecast, the CBO projects that real GDP will increase by 2.3 percent this year and 2.7 percent next year.
The CBO also projects that the jobless rate, which hit 9.1 percent in July, will fall to 8.9 percent by the end of this year but remain above 8 percent until 2014.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.