WASHINGTON (AP) — The nonpartisan Congressional Budget Office’s (CBO) 10-year outlook projects worsening long-term federal deficits and rising debt, driven largely by increased spending, particularly on Social Security, Medicare, and debt service payments. Compared to the CBO’s analysis from last year, the fiscal outlook has deteriorated modestly. Significant developments over the past year, including Republicans’ tax and spending measure known as the 'One Big Beautiful Bill Act', higher tariffs, and immigration policy changes, have been factored into the new report. As a result, the projected 2026 deficit is estimated to be about $100 billion higher. Total deficits from 2026 to 2035 are estimated to grow by $1.4 trillion, with debt held by the public expected to rise from 101% of GDP to 120%, surpassing historical highs. The CBO notes that while higher tariffs may partially offset these increases by generating an additional $3 trillion in federal revenue, they also contribute to higher inflation from 2026 to 2029. Rising debt service is increasingly problematic as repayment of borrowed money limits government spending on essential infrastructure and education, which are critical for future economic growth. CBO projections indicate that inflation will not align with the Federal Reserve’s 2% target until 2030. Jonathan Burks from the Bipartisan Policy Center stressed that large deficits are unprecedented in a growing, peacetime economy but highlighted that there remains a window for policymakers to take corrective action. It is urged that lawmakers examine options for revenue generation, spending cuts, and controlling major cost drivers before conditions worsen. Recent congressional efforts to manage rising national debt have largely involved targeted spending caps and debt limit suspensions, though often these measures coincide with substantial new spending that maintains high deficit levels. President Donald Trump implemented a Department of Government Efficiency to aim for budget balance through cuts, but analysts reveal that achieved reductions ranged from $1.4 billion to $7 billion predominantly through workforce reductions. Michael Peterson, CEO of the Peterson Foundation, remarked that the CBO’s latest projection serves as a critical caution to America’s leaders regarding fiscal responsibility. As the election approaches, there’s a growing awareness among voters regarding the linkage between rising debt and their own economic well-being, a conversation that will be crucial for the 2026 campaign.
CBO Forecasts Growing Federal Deficits Driven by Increased Spending
CBO Forecasts Growing Federal Deficits Driven by Increased Spending
The Congressional Budget Office warns of escalating federal deficits and a record high national debt, primarily influenced by spending on Social Security, Medicare, and debt servicing.
The Congressional Budget Office (CBO) has released a new 10-year forecast predicting rising federal deficits and increasing national debt levels. The report cites increased spending on Social Security, Medicare, and debt servicing as key drivers. Compared to last year's analysis, the fiscal outlook has worsened; the predicted deficit in 2026 is projected to be $100 billion higher, and the total budget deficits from 2026 to 2035 are expected to increase by $1.4 trillion. Although higher tariffs may generate an additional $3 trillion in revenue, inflation is anticipated to rise accordingly. Analysts call for urgent bipartisan action to address these fiscal challenges before they become more severe.
