“On August 23, CBO released its most recent budget and economic projections. Because the Congress was out of session at that time, we thought we’d review those budget projections today. (Earlier, our colleagues reviewed the economic projections.) In fiscal year 2016, the federal budget deficit will increase in relation to economic output for the first time since 2009, the Congressional Budget Office estimates. If current laws generally remained unchanged—an assumption underlying CBO’s baseline projections—deficits would continue to mount over the next 10 years, and debt held by the public would rise from its already high level. CBO’s estimate of the deficit for 2016 has increased by $56 billion since the agency issued its previous estimates in March, primarily because revenues are now expected to be lower than earlier anticipated. In contrast, the cumulative deficit through 2026 is smaller in CBO’s current baseline projections than the shortfall projected in March, chiefly because the agency now projects lower interest rates and thus lower outlays for interest payments on federal debt. Nevertheless, by 2026, the deficit is projected to be considerably larger relative to gross domestic product (GDP) than its average over the past 50 years. The Budget Deficit for 2016 Will Be About One-Third Larger Than Last Year’s – CBO now estimates that the 2016 deficit will total $590 billion, or 3.2 percent of GDP, exceeding last year’s deficit by $152 billion (see the table). About $41 billion of that increase results from a shift in the timing of some payments that the government would ordinarily have made in fiscal year 2017; those payments will instead be made in fiscal year 2016 because October 1, 2016 (the first day of fiscal year 2017), falls on a weekend. If not for that shift, the projected deficit in 2016 would be $549 billion, or 3.0 percent of GDP—still considerably higher than the deficit recorded for 2015, which was 2.5 percent of GDP…”