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Congressional Budget Office

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The US economy will be affected by the coronavirus pandemic for almost a decade, according to projections by the Congressional Budget Office (CBO).

The CBO forecasts the outbreak will cut US economic output by 3% between this year and 2030, a loss of $7.9 trillion.

The warning comes as tens of millions of people are out of work due to lockdown measures.

The CBO is a federal agency within the US government that provides budget and economic information to Congress.

America’s historic downturn comes even after trillions of dollars have been pumped into the economy.

Image source Wikimedia

Coronavirus: 33.3 Million Americans Filed Unemployment Claims in Last Six Weeks

The CBO said the majority of the loss was caused by the sharp contraction in economic activity this year, which it had not predicted in its last 10-year report, published in January.

CBO director Phillip Swagel wrote in response to an inquiry from Senate Minority Leader Charles Schumer: “Business closures and social distancing measures are expected to curtail consumer spending, while the recent drop in energy prices is projected to severely reduce US investment in the energy sector.”

“Recent legislation will, in CBO’s assessment, partially mitigate the deterioration in economic conditions,” he added.

Since the virus pandemic hit the US the government and the Fed have provided trillions of dollars of support for the world’s biggest economy.

Still, unemployment has soared to levels not seen since the Great Depression of the 1930s as more than 40 million Americans have already been put out of work.

The US unemployment rate hit 14.7% in April and on June 5 the Labor Department is expected to confirm that it reached 20% in May. In March that figure stood at just 4.4% having risen from a 50-year low from the month before.

There is an ongoing debate in the Congress over a new $3 trillion a new stimulus plan as well as a proposal to renew several federal aid programs that would otherwise lapse, including a temporary increase to jobless benefits that is set to expire in July.

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Around 14 million more people would lose health insurance coverage in 2018 under the new Republican healthcare plan, according to a budget analysis.

The Congressional Budget Office (CBO), a nonpartisan group of budget analysts and economists, released its assessment on the long-awaited Republican bill.

The CBO said the number of extra uninsured would jump to 24 million by 2026.

The bill would also reduce the federal deficits by $337 billion over the 10-year period, according to the CBO.

Those savings could help House Republicans sell the legislation to some conservatives who remain skeptical about costs.

President Donald Trump has backed the plan, which would replace the Affordable Care Act (ObamaCare), but the new legislation has faced a backlash from Democrats and even some Republicans.

Republicans have said the goal of the American Health Care Act is to lower costs and that coverage statistics are misleading due to the high out-of-pocket costs under President Barack Obama’s signature health law.

House Speaker Paul Ryan highlighted the CBO analysis’ conclusions on deficit reduction and decreased premiums.

He said: “I recognize and appreciate concerns about making sure people have access to coverage.

“[O]ur plan is not about forcing people to buy expensive, one-size-fits-all coverage. It is about giving people more choices and better access to a plan they want and can afford.”

Health and Human Services Secretary Tom Price said the administration “strenuously disagreed” with the report’s findings on the number of people who would lose coverage.

He said after the assessment was released: “Right now, current law, we’ve got individuals who have health coverage but no healthcare.”

Tom Price contended the new plan would cover more individuals at a lower cost.

Democrats jumped on the figures in the new assessment.

California Representative Adam Schiff tweeted that the numbers in it were “appalling” while Virginia Representative Don Beyer called it a “disaster”.

He tweeted: “Now we know why @Speaker Ryan rushed to pass his repeal bill; CBO says it kicks 24 million off their healthcare in next 10 years. Appalling.”

The CBO, along with the Joint Committee on Taxation, also found that five million fewer people would be covered under Medicaid, which covers low-income people, by 2018.

An estimated 14 million fewer people would enroll in the Medicaid program by 2026.

The report found that by 2026, an estimated 52 million people would be uninsured, compared with the 28 million who would not be covered that year under the current law.

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