CBO Estimates Coronavirus Aid, Relief, and Economic Security Act will Increase Deficit by $1.8 Trillion

The Congressional Budget Office (CBO) has released a preliminary estimate of the budgetary effects of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). CBO estimates “that the act will increase federal deficits by about $1.8 trillion”. “Although the act provides financial assistance totaling more than $2 trillion, the projected cost is less than that because some of that assistance is in the form of loan guarantees, which are not estimated to have a net effect on the budget.”

CBO acknowledges this estimate to be “uncertain” as the actual effects of the coronavirus pandemic including on the number of hospitalizations, total unemployment, and Medicare costs, “could differ significantly from what CBO has projected”.

The federal budget deficit at the end of 2019 was $984 billion.