$10 Trillion to Get to 3% and Other Fiscal Goals

Deficits would need to be reduced by $9.5 trillion over the next decade to stabilize debt at 100% of Gross Domestic Product (GDP). Roughly $10 trillion of deficit reduction would be required through 2036 to bring deficits down to the 3% of GDP target supported by the board of the Committee for a Responsible Federal Budget, Treasury Secretary Scott Bessent, business leaders, and experts and lawmakers of both parties.

The latest Congressional Budget Office (CBO) baseline projects that deficits will increase from 5.8% of GDP in fiscal year (FY) 2025 to 6.7% of GDP in FY 2036, pushing debt from roughly 100% of GDP today to 120% of GDP by 2036. Importantly, these figures and this analysis do not incorporate today's Supreme Court ruling that many recently-implemented tariffs are illegal. 

Gradually reducing deficits to 3% of GDP by 2036 – which would roughly stabilize debt-to-GDP over the decade and put it on a slow downward path thereafter – would require roughly $10 trillion of deficit reduction over the decade, depending on timing of the specific policies. About $8.5 trillion of this would need to come from spending reductions or revenue increases, with the rest coming from interest savings. 

Total Savings Needed to Meet Various Fiscal Goals

Sources: Congressional Budget Office and the Committee for a Responsible Federal Budget.
*Actual deficit reduction would vary dependent on savings path. Estimates above assume savings path consistent with offsets from the One Big Beautiful Bill Act (OBBBA) through 2032, extrapolated with additional policy extensions and assumptions through 2036. Figures are rounded to the nearest $500 billion.
 

More ambitious goals would require larger savings. For example, it would require over $14 trillion in ten-year savings to reduce debt to 90% of GDP or eliminate the on-budget deficit (which excludes Social Security and the postal service) by 2036. It would require nearly $19 trillion of ten-year savings to reduce debt to 80% of GDP or balance the budget by 2036. 

Stronger economic growth can make these goals somewhat easier to achieve, though delaying action will make them harder.

To achieve any of these goals, even with strong growth, policymakers will need to commit to substantial new deficit reduction. As we recently showed, securing the Social Security, Medicare, and Highway Trust funds could reduce deficits below 5% of GDP by 2036 and reduce debt below 111%.  Additional revenue and spending reductions would be necessary, however. Adopting Super PAYGO, which would require every dollar of future spending increases and tax cuts to be offset by 2 dollars of deficit reduction, could offer a start.