Today, the Congressional Budget Office (CBO) released a new budget baseline for 2018 to 2028. The baseline report shows a significant increase in projected budget deficits compared to the 2017 baseline.
CBO makes it clear that the primary driver of this deficit increase are the massive tax cuts that were passed into law late last year. This projection is consistent with CBO estimates published before the tax bill was even passed into law, showing the tax cut would add approximately $1.5 trillion to the deficit.
The CBO baseline matters because it demonstrates the current and near-term future fiscal health of the federal government. It provides policymakers with a snapshot of the government’s revenue (taxation) and spending trends, which helps them to make choices regarding future policy changes.