The Congressional Budget Office’s most recent report delivered a grim outlook for federal finances, noting that public debt will rise from nearly $29 trillion to $52 trillion by 2035.
That 2035 estimate is about 118% of U.S. gross domestic product, a measure of economic output. By 2029, debt as percentage of GDP will exceed the prior record set just after World War II in 1946.
CBO projects the federal budget deficit in fiscal year 2025 will be $1.9 trillion. That figure is expected to grow to $2.7 trillion by 2035. In later years of the next decade, federal spending grows faster than revenues, on average. In 2035, the adjusted deficit equals 6.1% of GDP – significantly more than the 3.8% that deficits have averaged over the past 50 years.
Congress has run a deficit every year since 2001. In the past 50 years, the federal government has ended with a fiscal year-end budget surplus four times, most recently in 2001.
The Committee for a Responsible Federal Budget said the financial outlook worsens if Congress renews President Donald Trump’s 2017 tax cuts.
“If Congress extends the individual and estate provisions from the 2017 Tax Cuts and Jobs Act before they expire at the end of 2025 without further offsets, debt would be much higher,” the group wrote in an analysis. “Under this alternative scenario, debt would grow to 129% of GDP by 2035. Deficits would be $4.6 trillion larger over the period without further offsets.”
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the U.S. can’t continue to spend at this rate.
“A fiscally weak country cannot remain a strong nation for long,” she said. “The United States has built a dangerous mountain of debt quite simply because our political leaders are unwilling to do the hard work of governing responsibly and acting as fiscal stewards for the country.”
MacGuineas said Democrats and Republicans will need to work together to address the nation’s financial challenges.
“Confronting this challenge will require leadership from both sides of Capitol Hill, both sides of the political aisle, and both ends of Pennsylvania Avenue,” she said. “Bond markets are currently sending alarming warning signals about the need to confront our fiscal profligacy. We need our political leadership to listen.”
Former U.S. Comptroller General David Walker, called the Paul Revere of fiscal responsibility, said the situation is worse than it looks.
“The federal government’s financial position is worse than advertised,” Walker said. “The debt subject to the debt limit is $36.2 trillion and total liabilities and unfunded social insurance obligations exceed $125 trillion! It’s time for action to create a better future.”
The CBO projections are based on economic trends as of Dec. 4, 2024 and incorporate legislation enacted through Jan. 6, 2025.
CBO figures don’t account for the political promises made by President Donald Trump’s administration.
Through the reconciliation process, Trump has promised to cut “hundreds of billions” in federal spending in 2025. Trump’s newly created Department of Government Efficiency has also pledged to cut spending. DOGE leader and Tesla boss Elon Musk has said the group will aim to cut $2 trillion, but will likely come up with about $1 trillion in total cuts.
