America's federal budget shortfall is on track to hit $2.3 trillion this year even if the House of Representatives doesn't approve another virus bailout package, according to reports Friday quoting the Congressional Budget Office in its latest forecast.
The U.S. total public debt will surpass the size of the national economy for the current fiscal year even without the $1.9 trillion financial boost being pushed by President Joe Biden, the office said.
The projected budget deficit for 2021 is slightly lower compared with the $3 trillion last year but still the second-biggest shortfall since World War Two - a reflection of the unprecedented emergency efforts approved by Congress as a result of the coronavirus crisis.
Based on the office's projection, the federal budget deficit in 2021 will be around $900 billion less compared with last year's while the national debt will increase to almost $23 trillion, or 102.3% of the U.S. gross domestic product. The nonpartisan office sees the national shortfall shrinking through 2024 when it will reach $905 billion then rise again to hit almost $2 trillion by 2031.
Congressional Democrats and Biden are seeking to pass the $1.9 trillion stimulus package through budget reconciliation, a process that would enable 50 Senate Democrats to authorize the measure without support from the Republicans.
Republicans have opposed the size of the aid, saying that spending $1.9 trillion is unnecessary now and that it will further expand the federal shortfall. But Democrats are likely to point to the office's new estimates to justify the approval of more aid.
Many economists say another budget allocation is needed to revive an economy that has stalled and an employment market that faces permanent damage.
Biden's proposed bailout package includes $1,400 direct payments to American families, an expansion to federal jobless claims, and funding for state and local governments.
