CBO’s Long-Term Debt Outlook Reaffirms Unsustainable Debt Trajectory
For Immediate Release
The Congressional Budget Office (CBO) released its Long-Term Budget Outlook today, which shows an unsustainable debt trajectory over the next three decades. Under current law, CBO estimates debt will rise from 79 percent of GDP in 2019 – and from over 100 percent today – to 202 percent of GDP by 2051. You can read more in our summary blog of the report, which will be posted here soon.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Last week, CBO projected our debt was on course to hit a new record within a decade. We now know the long-term outlook is even more perilous.
The combination of a strong economic recovery and shifting cash management strategies made the debt appear to flatten in the near-term – but it is still headed to astronomical levels.
By 2051, CBO projects debt will be 202 percent of the economy. Deficits will average 11.5 percent of GDP between 2042 and 2051 – even larger than they are projected to be this year during the ongoing effects of the pandemic. In that decade, interest will be the single largest federal government program, and in combination with health and retirement spending, will make up three-quarters of the budget.
We shouldn’t shy away from borrowing what’s needed to end this pandemic, support the recovery, and help sustain households and businesses through this crisis. But along the way, we can’t afford to ignore the long term.
Short-term thinking is what left us with so much debt before the pandemic, as lawmakers freely cut taxes and hiked spending during the economic expansion, while also failing to address the rising costs of our health and retirement programs. Today’s projections show why we need more focus on the big picture.
Ignoring this long-term debt picture will harm economic growth, hold down incomes, and make it even more difficult for us to tackle income inequality, support for families, and a backlog of necessary infrastructure improvements. CBO’s 10-year projections were like an engine warning light in your car. These 30-year estimates are an air raid siren that can be heard for miles. We can’t say we haven’t been warned.
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