Feb 12, 2021 02:02 AM EST
The Congressional Budget Office states that the federal government is already on its way to reach a $2.3 trillion deficit this year. This is roughly $900 billion lower compared to 2020 when the COVID-19 pandemic led Congress to provide unprecedented amounts of financial aid.
Stronger economic growth has helped lessen the expected shortfall for 2021. It is highly possible that the deficit could soon be revised upward if President Joe Biden's $1.9 trillion coronavirus relief package truly pushes through. The extra aid - coming after roughly $4 trillion was approved the previous year - would add more deficit certainly.
At present however, it is not yet accounted for in Thursday's CBO projections.
If Biden plan does not push through, this year's deficit will equal 10.3% of the Gross Domestic Product, which is a measure of the total value of the economy's goods and services. The past two years posed the highest deficits in relation to the country's GDP ever since 1945.
The CBO anticipates the budget deficit decline further for about $1 trillion in 2022 as the economy heals from the pandemic. There are likely going to be more reasons for the government to spend to rebuild the ravaged nation. Deficits are anticipated to average 4.4% of GDP from 2022 to 2031.
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Several decades of posing deficit spending imply that the total federal debt the public hold is a big bigger than GDP. That figure is calculated to rise to 107% of GDP by 2031 because Medicare and Social Security expenses are anticipated to increase.
According to Shai Akabas, economic policy director at the Bipartisan Policy Center, at the present, the COVID-19 package should be a priority. At the same time however, he issued a warning that the country still has to look for a way to put the deficit on a safer path.
"When it comes to recovery, the country faces many challenges that are likely to require an infusion of federal resources," Akbas said. "But it is crucial that lawmakers balance any new investment with a commitment to stabilizing the precarious fiscal picture that CBO highlighted today. In this realm, 'wait and see' is not a strategy - it is a fiscal risk."
The House Committee on Veterans' Affairs advanced a proposal Thursday that provide over $15 billion to the Department of Veterans Affairs.
Since the whole package is still being discussed, the committee discussed the elements of the plan Thursday can have an impact on the lives of veterans and the VA. At least four hours of discussion led the the committee to advance the proposal with a vote of 17-12. Afterwards, the they sent recommendations to the House Committee on the Budget.
The conclusion is that the whole process of having aid given to the veterans should be so much faster than it is now.
"We need to act with urgency to provide relief for veterans and all Americans," said Rep. Mark Takano, D-Calif., the committee chair. "The American Rescue Plan is critical to ensure veterans and the health system they rely on can continue to meet their needs and succeed in their role as the backup to America's overwhelmed health care systems," he added.
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