The COVID-19 pandemic will reduce the size of economic output by a combined $7.9 trillion over the next decade in real terms, or 3 percent of cumulative GDP, according to a report by the Congressional Budget Office.
The report compared economic and budgetary projections from before the pandemic to the most recent round of projections in May.
“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,” the report said.
The report also noted that “recent legislation will, in CBO’s assessment, partially mitigate the deterioration in economic conditions.”
Congress passed some $3.6 trillion worth of emergency relief legislation through March, pumping cash into struggling small businesses, as well as providing more robust unemployment benefits and stimulus checks among other actions.
Senate Democrats seized on the CBO report to pressure Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellThe Hill’s Morning Report – Presented by Facebook – Trump tweets as tensions escalate across US This week: Senate reconvenes as protests roil nation amid pandemic For city parks: Pass the Great American Outdoors Act now MORE (R-Ky.) to move on another relief bill quickly.
“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,” Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerJudd Gregg: Biden — a path to the presidency, or not Montana barrels toward blockbuster Senate fight Federal judges should be allowed to be Federalist Society members MORE (D-N.Y.) and Senate Budget Committee ranking member Bernie SandersBernie SandersJudd Gregg: Biden — a path to the presidency, or not Biden’s ‘allies’ gearing up to sink his campaign Expanding tax credit for businesses retaining workers gains bipartisan support MORE (I-Vt.) said in a joint statement, referring to the nominal $15.7 trillion figure CBO provided for economic loss through 2030.
“How can Senator McConnell look at these catastrophic economic numbers and believe there is no ‘urgency’ to protect America’s working families?” they asked, adding that further measures were necessary to avoid risking another Great Depression.
McConnell said he would not take up the $3 trillion HEROES Act passed by the House last month, but expected another, more targeted bill would be done by early July.