The Congressional Budget Office (CBO) released its Update to the Budget and Economic Outlook today, projecting that the national debt will set a new record as a share of the economy by 2027 while interest payments on the debt will approach their record as a share of the economy this year and exceed it next year. By 2034, the debt will grow to 122 percent of the economy compared to 99 percent at the end of Fiscal Year 2024.
CBO increased its projection of the budget deficit to $1.9 trillion in 2024, with interest payments of $892 billion this year and totaling $13 trillion over following decade.
Read our preliminary analysis here. Our full analysis will be published later this week.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Today’s projections show a shocking new record: interest payments on the national debt will soon be higher as a share of the economy than they have ever been in the history of the country. This is a surefire path to a weakened nation, and we must change course.
At nearly the size of the economy, the national debt is truly astounding. What’s worse is this might be the low point over the next decade – by 2027, debt will exceed its record as a share of the economy if we don’t make changes. By 2034, we’ll see debt at a massive 122 percent of output.
Over the past eight months of the fiscal year, we’ve spent more on interest payments on the debt than we have on national defense. We are already spending more on interest than we do on all federal spending for children, and we will see interest grow larger than Medicare spending this year.
With debt growing out of control, we need leadership now more than ever. This should be domestic issue number one in the presidential campaign. It’s time for Presidents Biden and Trump to put forward plans to fix our debt. And it’s long past time for Congress to act.
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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.
