Average Error Near the Beginning of Economic Downturns -5.444 Average Error for Other Projections 0.802 Average Error for All Projections 0.251
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Source: EPI analysis of the Congressional Budge Office's September 2019 report on past deficit and debt projection.

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The effects of the special reconciliation instructions would compound. As GDP contracts, it is more likely that the next CBO projection will also show a larger-than-expected increase in the debt-to-GDP ratio. This could spark more cuts and so on.

In fairness, the Senate Budget Committee would not necessarily be required to recommend deficit reduction that exactly matches the misstatement in CBO projections during a recession. But should this give us any comfort? The experience of the Great Recession says no.

With the economy in a deep recession, congressional Republicans intentionally throttled the economy with fiscal austerity measures for political gain, causing undue harm to millions of U.S. families. And too many policymakers and the media took the sudden turn to deficit-hawking by congressional Republicans seriously.

This all culminated in steep cuts to federal spending through the Budget Control Act of 2011, which significantly damaged the economic recovery from the Great Recession. If government spending following the end of the Great Recession had tracked spending in previous recoveries, a full recovery with unemployment around 4 percent would have been reached by the end of 2013. These new special reconciliation instructions, much like the House adoption of “Paygo” budgeting rules at the beginning of this Congress, reinforce the discredited economic view that deficits are unequivocally bad and only during outright recessions should deficit reduction move off center stage as a key policymaking priority. It is not unlikely that the special reconciliation instructions included in this reform effort could help turn a run-of-the-mill recession into something much, much worse.