CBO: Federal government's debt on track to exceed size of U.S. economy

The federal government's total debt is expected to exceed the size of the U.S. economy this year, the Congressional Budget Office (CBO) said Thursday.

Why it matters: The projection doesn't include President Biden's proposed $1.9 trillion economic stimulus package and could reignite pushback from Republicans who'd prefer a smaller bill.

By the numbers: The CBO projects the federal budget deficit will hit $2.3 trillion in 2021, and the country's debt will reach 102% of the GDP, a slight increase from last year.

• Yes, but: This year's annual federal deficit — the gap between government spending and collected tax revenue — is expected to be nearly $900 billion less than 2020's, according to the nonpartisan agency.

What they're saying: "At 10.3 percent of gross domestic product (GDP), the [federal budget] deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year," the CBO said in its report.

• "Those deficits, which were already projected to be large by historical standards before the onset of the 2020–2021 coronavirus pandemic, have widened significantly as a result of the economic disruption caused by the pandemic and the enactment of legislation in response."

What to watch: Without additional spending or tax cuts, the federal debt is expected to increase to 107% of GDP by 2031 — an all-time high in American history, per the CBO.

Go deeper: The stimulus debate: Is it too big?