CBO Reports $173 Billion Deficit for August
The United States borrowed over $2.7 trillion in the first 11 months of fiscal year 2021, including $173 billion in August, according to the latest Monthly Budget Review from the Congressional Budget Office (CBO). The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
We’ve borrowed $247 billion per month so far this year – a staggering amount that would have previously been unthinkable. A lot of that debt was justified in light of the COVID crisis, but with CBO projecting the national debt to hit a new record, it’s time to take stock of our fiscal situation.
Policymakers can’t keep heading down an unsustainable path. Short-term thinking is what left us with so much debt before the pandemic, as lawmakers freely cut taxes and hiked spending during the economic expansion while failing to address the rising costs of health care and retirement programs. Today’s projections show why we need to refocus our priorities.
Unfortunately, the legislation currently under consideration by Congress is likely to make the situation worse, not better. The bipartisan infrastructure plan would increase the deficit by several hundred billion dollars. Meanwhile, reconciliation and appropriations bills under discussion could borrow even more.
We learned last week that Social Security and Medicare are only a few years from insolvency. We should be working to secure those programs, not debating whether to deficit-finance new spending and tax cuts.
In this improving economy, it is important to recognize that it makes sense to borrow in bad times, and pay for things in good times – the borrow-borrow model we are stuck in will not end well.
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