Washington, DC—Not long after Congress passed a sweeping spending package that averted a government shutdown, new projections from the Congressional Budget Office provide a dire warning that the nation’s fiscal trajectory is unsustainable.
The following is a statement from BPC Senior Vice President G. William Hoagland:
“CBO’s new projections remind us yet again that we cannot afford to continue business as usual. We have reached the point of trillion-dollar deficits as far as the eye can see. Fueled by insufficient revenue and growing mandatory spending as the Baby Boomer generation retires, debt held by the public will grow to $31 trillion in 10 years, nearly equaling the size of the economy at 98% of GDP. CBO projects that interest payments on the debt alone will eclipse the federal government’s spending on Medicaid by 2025 and become the fourth largest item in the federal budget, after only Social Security, Medicare, and defense.
“The true picture is probably worse because CBO is required to assume a current-law scenario that is unlikely to occur, as it incorporates elements like the expiration of the 2017 individual tax cuts in 2025. Using more realistic assumptions, annual deficits will grow to $2 trillion by the end of the decade and debt held by the public will surpass the size of the economy, reaching a level nearly unparalleled in American history.
“These daunting projections should not be a surprise to anyone. For years, CBO’s budget outlooks have demonstrated that current policies are sending us down an unsustainable path. Yet, policymakers continue to ignore the problem and pass laws that make matters worse, like the 2017 tax cuts and last year’s budget-busting spending deal.
“There are bipartisan solutions that would put the nation’s finances on a healthier track. The only question is whether policymakers will have the political will to begin tackling this problem before it tackles us.”