89.7 F
Fort Worth
Wednesday, August 5, 2020

CBO projects virus impact could trim GDP by $15.7 trillion

Other News

Silent spread of virus keeps scientists grasping for clues

By CARLA K. JOHNSON, MATT SEDENSKY and CANDICE CHOI Associated PressOne of the great mysteries of the coronavirus is how quickly it...

Virus cases surging among the young, endangering the elderly

By CARLA K. JOHNSON and TAMARA LUSH Associated Press ST. PETERSBURG, Fla. (AP) — Coronavirus cases are climbing rapidly...

A side-by-side look at police reform bills in Congress

By MICHAEL BALSAMO Associated Press WASHINGTON (AP) — As congressional lawmakers work toward one of the most ambitious policing...

Lee Hamilton: Crisis shows the nation needs a change of direction

We’ve seen plenty of evidence lately of the deep polarization in this country. Even as ordinary Americans, for...


By MARTIN CRUTSINGER AP Economics Writer
WASHINGTON (AP) — The Congressional Budget Office said Monday that the U.S. economy could be $15.7 trillion smaller over the next decade than it otherwise would have been if Congress does not mitigate the economic damage from the coronavirus.
The CBO, which had already issued a report forecasting a severe economic impact over the next two years, expanded that forecast to show that the severity of the economic shock could depress growth for far longer.
The new estimate said that over the 2020-2030 period, total GDP output could be $15.7 trillion lower than CBO had been projecting as recently as January. That would equal 5.3% of lost GDP over the coming decade.
After adjusting for inflation, CBO said the lost output would total $7.9 trillion, a loss of 3% of inflation-adjusted GDP.
CBO called this a “significant markdown” in GDP output as a result of the pandemic.
“Business closures and social distancing measures are expected to curtail consumer spending, while the recent drop in energy prices is projected to severely reduce U.S. investment in the energy sector,” CBO Director Philip Swagel said in a letter.
“Recent legislation will, in CBO’s assessment, partially mitigate the deterioration in economic conditions,” Swagel said in the letter to Sens. Chuck Schumer, D-N.Y., and Bernie Sanders, I-Vt. The two had requested the information as a way to pressure Republicans to follow the lead of the House and pass more economic relief.
“Last week we learned that over 40 million Americans lost their jobs as a result of this horrific pandemic,” Schumer and Sanders said in a joint statement. “Today, the CBO tells us that if current trends continue, we will see a jaw-dropping $16 trillion reduction in economic growth over the next decade.”
Schumer and Sanders said Republicans should stop blocking legislation to provide more assistance given that 40 million workers have lost their jobs already.
“In order to avoid the risk of another Great Depression, the Senate must act with a fierce sense of urgency,” Schumer and Sanders said.
The CBO is forecasting that the GDP, which shrank at a 5% rate in the first three months of this year, will fall at a 37.7% rate in the current April-June quarter, the biggest quarterly decline on record.
The CBO also issued a separate report detailing a cost estimate for a $3.4 trillion COVID-19 rescue bill that passed the Democratic-controlled House in mid-May. That legislation is built around $915 billion in aid to state and local governments, another $1,200 payment to most American workers, and additional aid to colleges and local school districts. The price tag is slightly higher than a back-of-the-envelope figure provided by Democrats when the measure passed.
Senate Republicans have dismissed the proposal as a wish list but have yet to unveil any proposal to counter it.

- Advertisement -
- Advertisement -

Latest News

American, pilots agree on steps aimed at reducing job cuts

By The Associated Press undefinedAmerican Airlines has reached a deal with its pilots' union designed to reduce the number of job losses...

Nanoscope receives 2020 STEP Grant from Texas Department of Agriculture

Nanoscope Instruments was recently awarded a 2020 STEP Grant from the Texas Department of Agriculture (TDA) to facilitate...

USS Fort Worth Support Committee gets new executive director

Hanna Bell is the new executive director of the USS Fort Worth Support Committee, returning to her hometown...

JLL arranges equity, construction financing for South Fort Worth Logistics Center

JLL Capital Markets announced Aug. 4 that it has arranged equity and construction financing for South Fort Worth Logistics Center, a state-of-the-art,...

Retail rout gains pace, Lord & Taylor seeks bankruptcy

NEW YORK (AP) — Lord & Taylor, America's oldest retailer, is seeking bankruptcy protection, as is the owner of Men's Wearhouse and...