CBO: Debt Will Rise to 156% of the Economy in 30 Years

The Congressional Budget Office (CBO) released its latest Long-Term Budget Outlook today, showing that under current law, debt will rise from 100 percent of Gross Domestic Product (GDP) at the end of this fiscal year to 156 percent of GDP by 2055. Interest as a share of GDP will increase by nearly three-quarters from a record 3.2 percent of GDP this year to 5.4 percent by 2055. CBO also projects that the trust fund for Social Security retirement benefits will exhaust in 2033 and the theoretically combined Social Security retirement and disability insurance trust fund will be exhausted in 2034.

Read our summary of the report here; 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: 

Interest costs are rising rapidly, debt is on track to blow past its record in just four years, and we’re set to have one of the largest debt burdens in the world by 2055 – and there’s hardly a whisper on how we should deal with it. In fact, we’re mostly hearing about how we should make it even worse.

CBO reports like this routinely present a sobering assessment of the dismal state of America’s finances, and our political leaders nod their heads in agreement that we need to do something. And then they do nothing, or even worse – they claim their priorities are too important to let the threat of higher debt get in the way of enacting their agenda.  

It was just two years ago when Congress enacted the Fiscal Responsibility Act, which enacted the largest deficit reduction package in over a decade. It wasn’t a perfect package, but it was a start on addressing our fiscal situation with the seriousness it deserves. We hoped that that exercise would create good muscle memory to keep going and build off its successes.  

Unfortunately, now we are staring down the barrel of a $3 trillion or more package of more debt, which could turn into $37 trillion of debt on top of today’s projections.  

On top of this higher debt, the Social Security trust fund is running out fast – it will be exhausted by 2033, at which point benefits will be cut across the board. The clock is ticking; what was once tomorrow’s problem is urgently becoming today’s.

We need to snap out of this fiscal malaise and do the important work of budgeting, getting our fiscal house in order, and securing our nation’s future. 

###

For more information, please contact Matt Klucher, Assistant Director of Media Relations, at klucher@crfb.org.