US to release budget projections for upcoming decade
The Congressional Budget Office (CBO) will today release a report detailing its projection for the health of the US economy over the next decade.
The report foresees a return to pre-pandemic levels of economic activity by 2022. Ultimately, with the deficit widening from $780 billion to $2.3 trillion at the end of July, the path to normalcy is largely dependent on Congressional ability to handle an increasingly heavy debt burden in the midst of stagnant consumer activity. Uncertainty is written all over projections for economic recovery, especially as the global economy is subject to ever-growing budget deficits as other states try to mitigate the pandemic’s effects.
Congressional Republicans have agreed to increase the aid package to $500 billion, well below the $2 trillion demanded by Democrats. Although the stimulus provides support to millions of Americans, 25% of the benefits have to be provided by state unemployment agencies, which aren’t receiving additional federal funding and already find themselves in the red. Expect Republicans to continue to push reduced stimulus bills as Democrats are torn between pumping more money into working-class pockets or into the endangered postal service. As the country heads into one of the most unpredictable elections in its history, legislative gridlock will likely prolong the period of recovery.
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