CBO projects $1.9 trillion federal budget deficit this year

The Congressional Budget Office projects a $400 billion increase in this year's federal budget deficit, driven by various factors including higher costs from supplemental spending, increased Medicaid spending, and rising FDIC insurance expenses. The report also forecasts a rise in the nation's publicly held debt to 122% of GDP by 2034. President Biden's budget proposal aims to reduce the deficit by $3 trillion over the next decade, but the CBO estimates that extending Trump's tax cuts could add nearly $5 trillion to deficits. Lawmakers are urged to address the growing debt challenge and fiscal deadlines looming ahead. The federal budget deficit is expected to reach $1.9 trillion this fiscal year, with increased outlays for deposit insurance and Medicaid. The CBO projects a deficit of $2 trillion in 2024, growing to $2.8 trillion by 2034. Federal debt held by the public is set to surpass historical peaks, reaching 122% of GDP in 2034. Immigration is projected to lower deficits by $0.9 trillion over the next decade. However, the uninsured rate is expected to rise to 8.9% in 2034, with significant increases among adults aged 19 to 44. The number of people with Medicaid coverage is projected to decline due to policy changes. These projections pose challenges for the Biden administration and future fiscal discussions in Congress.