CBO Says 2010 Deficit Slightly under $1.3 Trillion

CBO, in its most recent Monthly Budget Review, estimated that the FY 2010 budget deficit (the fiscal year that ended at the end of September) was just short of $1.3 trillion, $125 billion less than last year's deficit of $1.4 trillion. At 8.9 percent of GDP, this is the second highest deficit-GDP rate since World War II, with the highest being last year's 10 percent. This number also represents a slight drop from the 2010 deficit CBO reported in its most recent Budget and Economic Outlook this past August.

While the deficit is slightly lower than last year, we are by no means on the path to triumph over our fiscal challenges. In our recent realistic baseline, CRFB projected that while deficts will decline in the next few years, the debt will continue to rise as a share of the economy to unsustainable levels without action.

Although an improving economy (hopefully) will reduce deficits in the short-term, we must devise a plan of action now to address the structural issues that will cause the debt to skyrocket. Click here to try doing so yourself.

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Student Loans Cost $340 Billion More than Expected

Based in part on new data from the Congressional Budget Office, this piece shows: The estimated federal cost of student loans issued between 2015 and 2024 has increased by $340 billion – from a projected gain of $135 billion in the 2014 baseline to an expected loss of $205 billion in the 2024 baseline. Much of the cost increase can be explained by the expansion and increased enrollment in income-driven repayment (IDR). In forward projections, graduate school loans are now nearly as subsidized as undergraduate loans and make up half of the cost of newly issued student loans. Reforming graduate loans to be cost-neutral would generate over $100 billion in deficit reduction over the next decade.

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