(The Center Square) – The U.S. Congressional Budget Office, the official budget projection resource for the federal government, released a string of alarming figures in its latest projections this week.
CBO projects the deficit will nearly double in the next decade, reaching $2.9 trillion by 2033. The annual deficit for the next decade will average $2 trillion.
The federal debt held by the public will rise “from $24.3 trillion at the end of 2022 to $46.4 trillion at the end of 2033.”
“As a percentage of GDP, that debt is projected to stand at 118 percent at the end of 2033 – about 21 percentage points higher than it was at the end of 2022 and about two and a half times its average over the past 50 years,” CBO said.
The gross federal debt is projected to hit $52 trillion by 2033.
A surplus of new federal spending could worsen those figures.
The Committee for a Responsible Federal Budget raised the alarm over these latest numbers.
“As a share of GDP, debt will grow from 97 percent at the end of FY 2022 – already more than twice the historic average of 47 percent seen over the last half-century – to a record 107 percent of GDP by 2028. It will continue to grow thereafter, topping 118 percent of GDP by the end of 2033,” the group said in a statement. “This is substantially higher than predicted in CBO’s May 2022 baseline, which had debt reaching 110 percent of GDP by the end of 2032. Over the longer run, CBO projects debt will reach 195 percent of GDP by 2053.”
The group argues cutting federal spending is a must to address the problem.
“Spending on health, retirement, and interest will grow rapidly while revenue fails to keep up,” the group said in a statement. “Spending will grow from 23.7 percent of GDP in 2023 to 25.3 percent by 2033, while revenue will fall to a low of 17.4 percent of GDP in 2025 before rising to 18.1 percent in 2030 and beyond. Interest costs alone will reach a record 3.6 percent of GDP – $1.4 trillion – by 2033.”
The troubling debt projections come as Congress faces the more immediate deadline of raising the debt ceiling. The federal debt surpassed $31 trillion last year.
Treasury Secretary Janet L. Yellen sent a letter to Congressional leaders in January notifying them that the agency has begun taking “extraordinary measures” as the federal government hits that $31 trillion debt limit.
That means Congress has until about June to raise the debt ceiling or potentially default on U.S. debt obligations for the first time ever.
Some Republicans are pushing to use the deadline as a tool to force spending cuts, though others are wary of risking a default or of the political blowback that may ensue.