New budget projections show US hitting debt record in 4 years: CBO

The nonpartisan Congressional Budget Office (CBO) released its latest 10-year budget and economic outlook Friday that shows the federal government is on track to break the debt record set 80 years ago.

The CBO’s outlook shows that the federal debt held by the public as a percentage of GDP, or the size of the U.S. economy, was at 98 percent of GDP growth at the end of the fiscal year. 2024 to 107% of GDP by 2029 budget.

At that time, the public debt not only exceeded the size of the US economy, but it exceeded the 106% of GDP recorded in 1946, when the US began the process of deregulation. The Second World War. In the year It is predicted to reach 118 percent of the GDP by 2035 and continue to grow in the future.

“From 2025 to 2035, debt growth will outpace growth in Social Security, Medicare and interest payments,” CBO Director Philip Swagel told reporters.

The federal deficit continues to grow, and the Congressional Budget Office has solutions.

The federal government is projected to run a $1.9 trillion budget deficit in fiscal year 2025. The deficit was projected to decline briefly over the next two years before resuming to a projection of more than $2 trillion in fiscal 2030 and reaching $2.7 trillion in fiscal 2034.

The temporary decline in the deficit is due in part to the expiration of the 2017 tax cuts at the end of this year, which has led to an increase in tax revenue under current law. Although Congress and the incoming Trump administration could pass new legislation that would extend these provisions.

CBO’s analysis is based on current law, so changes in federal tax and spending policies could change those figures.

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Much of the deficit growth is due to increased spending on entitlement programs such as Social Security and Medicare, and the aging of the US population at a time of high interest rates and the rising cost of servicing the huge national debt.

Spending on Social Security is expected to grow from $1.5 trillion in 2025 to $2.6 trillion in fiscal 2035, while Medicare spending is expected to grow from $942 billion to $1.7 trillion. The cost of paying interest has grown to more than $1.7 trillion over a decade, from a projected $952 billion this fiscal year.

Swagle also estimated that the Social Security Old-Age and Survivors Insurance Trust Fund could be depleted by 2033, the same year as the CBO’s latest analysis projected last June.

When that trust fund is depleted, Social Security beneficiaries will see an immediate reduction in benefits under the law, similar to payroll tax revenue, resulting in a 21% reduction, according to an analysis by the nonpartisan Committee for Accountability of the Federal Budget (CRFB). Social security benefits.

The national debt of the United States is at a new record: $ 36 trillion

CRFB president Maya McGuinness said in a statement: “A financially weak country cannot remain a strong country for long.” “The United States has built a dangerous mountain of debt because our political leaders have refused to take responsibility and do the hard work of being fiscal stewards of the country.

“Rather than admit that the budget department has a plan to pay the bills, they would rather borrow at record levels and continue to do incredible damage to the country as the debt continues to rise,” she added. “As today’s report shows, our debt is at record levels only since World War II, and we spend more on interest than any other program except Social Security and Social Security, which will be bankrupt in less than a decade.”

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“We are on a fiscal path that is unsustainable by any definition,” said Michael Peterson, CEO of the Peter G. Peterson Foundation. It amounts to 118 percent of our total economy.

“Today’s report presents a grim outlook, but the good news is that there are many policy solutions to address our fiscal challenges,” Peterson added. “As we approach Inauguration Day, our leaders have a new opportunity to secure America’s economic future by putting us on a stronger and more sustainable fiscal path.”