CBO Increases Projected Deficit Estimate | Citizens Against Government Waste

CBO Increases Projected Deficit Estimate

The WasteWatcher

On August 5, 2016, the Congressional Budget Office (CBO) released its “Monthly Budget Review for July 2016.”  The CBO increased its projection of fiscal year 2016 deficit by 10 percent, from $534 billion to $590 billion, in its review.  The non-partisan agency attributes the deficit increase to lower-than-expected revenues.  In addition to lower revenues, costs have also risen.

In the review, CBO found that spending rose for Social Security benefits, net interest on the public debt, Medicare, Medicaid, and the Department of Veterans Affairs.  The CBO found that spending on Social Security benefits rose by $24 billion (three percent), but pointed out that this reflects “typical growth in the number of beneficiaries and in the average payment.”  Net interest on the public debt increased by $23 billion (11 percent) due to inflation differences.  Medicare and Medicaid spending both climbed four percent ($18 billion and $11 billion, respectively) due to changes to prescription drug plans in Medicare and new enrollees in Medicaid through the Affordable Care Act.  Similar to Medicaid, spending increased to the Department of Veterans Affairs due to the increase of veterans receiving disability payments.  Spending by the Department of Veterans Affairs increased by five percent, or $7 billion.

The CBO asserts that the deficit increase is due to lower than expected revenues, i.e., taxes.  Rather than finding more revenues, Congress should reduce spending, considering that any additional revenues come out of the pockets of the hard-working taxpayers that actually fund the federal government. 

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