Inflationary U.S. Federal Budget Projections

• New dataset of 33 CBO long-term budget projections published in 2009–2025 • Report-to-report revisions show how current shocks reshape future budgets • Generally, current deficits are not offset by expected future surpluses • Post-pandemic deficits persist, supported by a low interest–growth gap • Post-pandemic inflation is linked to deteriorating fiscal fundamentals We build a new dataset with 33 budget reports issued by the Congressional Budget Office (CBO) between 2009 and 2025. It combines 30-year projections of primary surpluses, inflation, real GDP growth and debt returns to track report-to-report changes in expectations. Then, we estimate how surprises in the current budget and inflation are linked to revisions of future fiscal paths and financing conditions. Over the full sample, larger-than-expected deficits are followed by a temporary fall in the interest-growth differential ( r-g ) but not by future surpluses, while unexpected inflation mostly raises r-g without altering projected balances. In the post-2020 reports, however, weaker fiscal outcomes and higher inflation coincide with persistent deficit revisions and a permanently lower r-g . These results suggest that post-pandemic inflation reflects worsening fiscal fundamentals and changing market perceptions of U.S. debt.