House Budget Committee Republican Leader Jason Smith (MO-08) issued the following statement after the Congressional Budget Office (CBO) released The Budget and Economic Outlook: 2022 to 2032:
“The update from CBO today is sobering. Under President Biden, America’s fiscal health is deteriorating right in front of our eyes. The latest CBO baseline projects $16 trillion of additional debt over the next 10 years, $5 trillion more compared to where CBO projected the debt would be when Biden took office – brought on by $72 trillion in spending over the next 10 years, an $11 trillion increase over their projections from February of 2021. Because of President Biden and Washington Democrats’ reckless spending and failed policies, the country’s budgetary and economic outlook is collapsing, and the American people are literally paying the price for it. Inflation is higher, interest rates are rising, the economy is underperforming – shrinking 1.4 percent in the most recent quarter – all the while federal spending and debt is going up and up.
“Had President Biden and Washington Democrats succeeded in getting their Build Back Broke agenda enacted into law, the nation’s budget and economic outlook would have taken an even bigger hit. Washington Democrats wrote that bill when they were either denying inflation was an issue or dismissing it as ‘temporary’ and ‘transitory.’ Now, they are trying to sell their scheme as the cure for America’s economic woes at the same time CBO has already confirmed the plan would only make America’s fiscal health worse with $5 trillion in new spending that will further fuel inflation and add $3 trillion to the national debt.
“The only silver lining in CBO’s report is the increase in revenues to the federal government thanks to the Republican-passed Tax Cuts and Jobs Act. Revenues are increasing way beyond expectations. After growing by 18 percent in 2021, the highest level in almost 50 years, tax revenue is growing by 39 percent so far this year – the largest growth since 1944. Revenues are far outpacing what CBO predicted back when the tax relief was enacted into law. The doom and gloom projections about a drastic drop in tax revenue has never materialized, and yet Democrats still want to repeal that tax relief and raise taxes on a weakened economy and Americans battling every day to make ends meet and provide for their families. Washington Democrats should see this latest report from CBO as the wake-up call it is and abandon their agenda of higher taxes and inflationary deficit spending.”
Read CBO’s baseline summary here.
Key Points from CBO’s Budget and Economic Outlook:
- $72 trillion in spending over ten years – $11 trillion higher than CBO’s February 2021 baseline projections.
- $16 trillion debt increase by 2032, $5 trillion higher than CBO’s February 2021 baseline projections.
- Inflation in 2022 and 2023 is projected to be 64 percent above CBO’s February 2021 baseline. This after last year’s inflation was more than triple CBO’s projections when Biden took office.
- Inflation has risen 11 percent since Joe Biden became President.
- 110 percent debt-to-GDP ratio by 2032, surpassing the historic high of 1946 when debt-to-GDP was 106 percent following World War II.
- Real GDP growth in the first quarter of this year is negative 1.4 percent, 4.3 percentage points less than CBO projected for this period when Biden took office.
- Revenues total $56 trillion over ten years, averaging 18.1 percent of GDP.
- Revenues are projected to be 19.6 percent of GDP in 2022, a figure exceeded only three times in American history.
- Average interest rates will be 40% HIGHER the next 10 years compared to what CBO predicted when Biden took office.
- CBO’s February 2021 baseline predicted interest rates would not rise until 2024.
- $3.5 trillion in additional debt over the next 10 years due to higher interest rates.
- Republican Leader Smith recently released a report on the dangerous impact of rising interest rates on the national debt.