CBO Projects Debt to Exceed Record in 4 Years
The Congressional Budget Office (CBO) released its latest Budget and Economic Outlook today, projecting that the national debt will eclipse its record as a share of the economy by 2028 and exceed 116 percent of the economy by 2034. Debt held by the public will grow by $21.2 trillion over the next decade, from $27.1 trillion today to $48.3 trillion by the end of 2034.
CBO projects the budget deficit will total $1.5 trillion in 2024 and grow to $2.6 trillion by 2034. Interest payments on the debt will balloon from $659 billion in 2023 to more than $1.6 trillion – a record 3.9 percent of GDP – by 2034.
CBO also projects that the trust funds for highways and Social Security Old-Age and Survivors Insurance will be exhausted by the end of the decade. Our preliminary analysis of the report is available here, and a full analysis will be published later today.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Our debt is rising out of control, and it’s time for Congress to wake up. The outlook has improved some thanks to the bipartisan Fiscal Responsibility Act, but our fiscal situation remains precarious. The national debt will reach a new record as a share of the economy in four years, and interest costs will hit a record in just two years.
Within the decade, the Social Security retirement and highway trust funds will be insolvent, requiring painful across-the-board cuts. And by 2034, debt will reach an unprecedented 116 percent of output.
It’s hardly a surprise that we’re in this predicament. For years, policymakers have relentlessly added to the national credit card – sometimes with good justification, like during COVID, but other times to avoid the hard choices necessary to offset desired spending increases and tax cuts. And all the while, they’ve ignored the rapid automatic growth of our major health and retirement programs.
Deficits have topped $1 trillion for more than five years now, and they will continue to grow and pass $2.6 trillion by 2034.
Interest on the national debt, already higher than federal spending on children or Medicaid, will exceed spending on defense this year, on its way to $1 trillion by 2026. This is no way to run a country.
Policymakers need to take this somber moment to reflect on the grave situation we face and commit themselves to do better. Last year’s Fiscal Responsibility Act was a good start, but there is so much more to be done.
We can start by actually passing a budget and by establishing a bipartisan fiscal commission to tackle some of these issues. We need a real plan to put the national debt on a downward sustainable path before it’s too late.