CBO: Deficit will hit $3.3 trillion this year, debt will exceed size of economy by 2021

The deficit is projected to hit a record $3.3 trillion this year, and the national debt will exceed the size of the U.S. economy by 2021, according to a Congressional Budget Office report published Wednesday.

"CBO projects a federal budget deficit of $3.3 trillion in 2020, more than triple the shortfall recorded in 2019. That increase is mostly the result of the economic disruption caused by the 2020 coronavirus pandemic and the enactment of legislation in response. At 16.0 percent of gross domestic product (GDP), the deficit in 2020 would be the largest since 1945," according to the CBO's updated budget outlook for 2020 to 2030.

The record deficit is projected to drive the "federal debt held by the public" to 98 percent of GDP in 2020, "compared with 79 percent at the end of 2019 and 35 percent in 2007, before the start of the previous recession."

"It would exceed 100 percent in 2021 and increase to 107 percent in 2023, the highest in the nation’s history. The previous peak occurred in 1946 following the large deficits incurred during World War II. By 2030, debt would equal 109 percent of GDP," the CBO reported.

Federal revenues are expected to decline this year through 2021.

"Federal revenues are projected to fall from 16.3 percent of GDP in 2019 to 15.5 percent in 2021, primarily because of the economic disruption caused by the pandemic and the federal government’s response," according to the nonpartisan CBO. "Revenues rise after 2021, reaching almost 18 percent in 2030, as a result of the expiration of temporary provisions enacted in response to the pandemic, scheduled increases in taxes, and other factors."

The current debt held by the public is $20.8 trillion and the total national debt is rising to $27 trillion.