U.S. Economy Faces Long-Term Recovery, C.B.O. Says

The hit to the U.S. economy could last for a decade.

The Congressional Budget Office projected on Monday that the coronavirus pandemic could cost the United States economy $16 trillion over the next 10 years. When adjusting for inflation, the pandemic is projected to cause a $7.9 trillion, or 3 percent, loss in “real” G.D.P. through 2030.

The projections reflect the steep long-term toll that the pandemic is likely to take on the economy, which could experience dampened consumer spending and business investment in the years ahead. Much of the diminished output is projected to be the result of weaker inflation, as prices for energy and transportation increase more slowly than they otherwise would have as Americans pull back on travel.

Phillip L. Swagel, the director of the budget office, acknowledged that “an unusually high degree of uncertainty surrounds these economic projections” because of what remains unknown about the pandemic’s trajectory, as well as the impact of social distancing and the legislation enacted by the federal government.

“If future federal policies differ from those underlying C.B.O.’s economic projections — for example, if lawmakers enact additional pandemic-related legislation — then economic outcomes will necessarily differ from those presented here,” Mr. Swagel wrote in a letter to Senators Chuck Schumer of New York, the minority leader, and Bernie Sanders, the Vermont independent. The two senators had asked the budget office on Wednesday to examine the impact of the pandemic and the shuttering of local economies to combat the spread of the virus as lawmakers look to negotiate another round of economic aid.

In a joint statement following the release of the report, Mr. Schumer and Mr. Sanders said the estimate undercut Republican arguments that Congress should wait to approve another relief package, as well as President Trump’s call to include a tax cut in the next measure. “In order to avoid the risk of another Great Depression, the Senate must act with a fierce sense of urgency to make sure that everyone in America has the income they need to feed their families and put a roof over their heads,” the two senators said. “The American people cannot afford to wait another month for the Senate to pass legislation. They need our help now.”

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This article was originally published on The New York Times

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