For private health insurance premiums, which CBO uses as an input in its calculation of marketplace subsidies, the average annual rate of excess cost growth from 2028 through 2030 implicit in CBO’s baseline projections is 1.5 percent, which is higher than last year’s estimate of 1.4 percent for the 2027–2029 period. Many other factors affect revenues—but to a lesser extent—in the extended baseline projections. See Congressional Budget Office, An Update to the Budget Outlook: 2020 to 2030 (September 2020), www.cbo.gov/publication/56517, and An Update to the Economic Outlook: 2020 to 2030 (July 2020), www.cbo.gov/publication/56442. Those revenue reductions are projected to grow steadily throughout the period. Net spending for interest rises rapidly and accounts for most of the growth in total deficits in the last two decades of the projection period. During and after the financial crisis associated with the 2007–2009 recession, and also in response to the adverse economic effects of the pandemic, the Federal Reserve has employed additional policy tools beyond interest rates. Even if future tax and spending policies did not vary from those specified in current law, budgetary outcomes would undoubtedly differ from those in CBO’s extended baseline projections because of unexpected changes in demographics, the economy, and other factors. © 2020, Nasdaq, Inc. All Rights Reserved. Boeing Investors Financial Reports Quarterly Reports. Even in the absence of an abrupt fiscal crisis, high and rising debt could generate persistent negative effects on the economy beyond those incorporated in CBO’s extended baseline projections, including a gradual decline in the value of Treasury securities and other domestic assets. However, the long-run decline in labor force participation means that less of the population’s growth translates into labor force growth. 19. However, the additional burden on people in younger generations resulting from delaying policy changes would be relatively small compared with their lifetime earnings potential because, on average, people in future generations are expected to have much higher income than those in current generations. In particular, the agency projects that borrowing by the federal government would crowd out some private investment in capital over time. CBO projects that, on net, climate change will reduce the growth rate of real GDP from 2020 to 2050 by an average of 0.03 percentage points compared with what the growth rate of real GDP would have been if the climatic conditions remained the same through 2050 as they were at the end of the 20th century.
This report is the latest in the series. CBO estimates that discretionary outlays will increase to 8.0 percent of GDP in 2020, stemming from the policies put in place to counter the pandemic-related economic disruption.