2015 Tax Breaks Increase Deficit Projections, Hearings Set

“In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009,” the Congressional Budget Office (CBO) stated in a summary of a semi-annual report, The Budget and Economic Outlook: 2016 to 2026. CBO now predicts the federal deficit will grow by about $8.5 trillion from 2016 to 2025, up from previous estimates of $7 trillion.  The permanent extension of tax breaks approved by Congress and signed into law by President Barack Obama at the end of 2015 account for about half of the CBO’s projected $1.5 trillion ten-year increase.

Other factors contributing to the projected deficit increase, according to the CBO summary, include a slowing of the economy and increased outlays for Medicaid and veterans’ benefits.

The Senate and House Committees on the Budget have scheduled hearings on the full CBO report, which is expected to be released the week of January 25. The Senate Committee on the Budget will hold its hearing on January 26 at 10:30 am ET in room 608 of the Dirksen Senate office building. The House Committee on the Budget will hold its hearing on January 27 at 9:30 am ET in room 210 of the Cannon House office building. CBO Director Keith Hall is the only witness scheduled for both hearings.

Read CBO’s summary of the report at https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51129-2016_Outlook_Summary.pdf