On January 28, 2019, the Congressional Budget Office (CBO) released its annual Budget and Economic Outlook for 2019 to 2029 and unsurprisingly, the United States’ fiscal outlook remains dreadful.

CBO estimates a 2019 deficit of $897 billion, a $118 billion increase from 2018.  Trillion-dollar deficits will resume in 2022 and reach all-time highs by the end of the 10-year budget period.  From 3.8 percent in 2018, budget deficits will rise to 4.8 percent of gross domestic product (GDP) in 2028, a trend only exceeded by eight other years since 1946 (four during the 2007 to 2009 recession).

Total deficits over the decade will reach $11.6 trillion.  Debt held by the public will increase from 78 percent in 2018 to nearly 93 percent of GDP by 2029, higher than any point since World War II.  Beyond the 10-year window, the federal debt would continue to grow, reaching a whopping 150 percent of GDP by 2049.

CBO found that the primary culprit of these out-of-control deficits is all too familiar: unreasonably high federal spending.  While Congress’s insatiable appetite for discretionary spending is always concerning, the primary debt-driver is mandatory programs.  Over the next decade, mandatory program outlays are expected to rise by 6 percent annually, accounting for 15.1 percent of GDP by 2029.  The only time mandatory spending exceeded 14 percent since 1962 was in 2009 during the height of the Great Recession.

One unprecedented observation from CBO’s report comes from its unemployment projections.  Historically, when unemployment rates are below 6 percent, deficits tend to remain relatively low at around 1.5 percent of GDP.  However, during this 10-year window, unemployment is expected to remain under 5 percent while annual deficits will rise to 4.5 percent of GDP.

The unemployment rate is certainly a positive oddity in an otherwise dreary report.  CBO’s analysis suggests “significant negative consequences, both for the economy and for the federal budget” each year these fiscal woes remain unaddressed.  Such problems include higher interest payments, weaker capital stock, lower wages, an inability to respond properly to unexpected catastrophes, and worst of all, an increased likelihood of another financial crisis.

Economists from both sides of the aisle agree that a debt crisis is looming and CBO’s numbers should only further alarm taxpayers.  Instead of punting this issue further down the road, the 116th Congress should restrain Washington’s chronic spending problem and prioritize meaningful budget process reforms that will curtail, rather than exacerbate, a grim financial situation.