CBO Projects Debt to Reach Record Levels
For Immediate Release
The Congressional Budget Office (CBO) released its Updated Budget and Economic Outlook for the next decade, projecting the national debt to reach a new record of 106.4 percent of Gross Domestic Product (GDP) by 2031. CBO projects deficits will total $3.0 trillion in 2021 and $12.1 trillion over the subsequent decade under current law. Enacting new deficit-financed legislation, extending expiring provisions, or increasing appropriations levels would all further worsen this fiscal outlook.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Today’s report underlines the need for us to address our nation’s fiscal challenges. Despite the improvements in the outlook from the recovering economy, the national debt is set to hit a new record, exceeding even World War II levels. From there, we expect the debt to experience unfettered growth. This is not sustainable.
Over the next decade, interest alone will cost $5.4 trillion – or $1.5 billion per day. By 2031, we’ll be spending $2.5 billion per day on interest payments.
While it made sense to borrow to weather the pandemic and jumpstart the recovery, the strong economic growth projections from CBO show that it is time to pivot away from further deficit-financing and towards paying for things and, ultimately, decreasing the national debt from its current path.
It is very encouraging to hear calls by many to pay for important new initiatives, such as investments in infrastructure, education, and workforce development. But our fiscal situation demands real offsets that allow us to reap the benefits of these investments – not ones that paper over the issue or don’t even try to prevent deficits from growing larger.
For too long, we have been borrowing for consumption and footing our kids with the bill. It’s time to end that practice and get our fiscal house in order.
That means paying for new initiatives, securing our trust funds, lowering health costs, reducing wasteful spending, cutting tax breaks, and raising enough revenue to finance our spending.
It’s time to put this country on a sustainable fiscal trajectory.
For more information about CBO's Updated Budget and Economic Outlook, please see our preliminary analysis here.
For more information, please contact Ben Tomchik, deputy chief of staff, at firstname.lastname@example.org.