According to the nation’s budget scorekeeper, the United States is on track to surpass past economic estimates and add a stunning $19 trillion to the national debt in the next decade.
In a study released on Wednesday, the Congressional Budget Office warned that the country’s budgetary direction must be altered by tax increases or spending cuts.
Director of the Congressional Budget Office Phillip Swagel noted in a letter accompanying the study, “Over the long term, our predictions indicate that adjustments in fiscal policy are needed to manage the rising costs of interest and minimize other negative implications of high and rising debt.”
The CBO estimates that within a decade, the national debt will reach historic levels in relation to the size of the economy. The CBO projects that public debt will reach 118 percent of GDP by 2033, the highest amount ever recorded.
New forecasts from the CBO indicate $3 trillion more would be added to the national debt by 2033 than previously anticipated.
Director of the Congressional Budget Office Phillip Swagel addresses a news briefing on the publication of new economic statistics on February 15, 2023 in Washington, DC.
The research projects a $1.4 trillion budget deficit between government expenditures and tax receipts in 2023.
The CBO forecasts that deficits will average $2 trillion per year over the next decade, as tax receipts continue to trail behind the mounting expenditures of social programs like Social Security and Medicare.
In addition, the nonpartisan budget organization forecasts that the US economy would barely expand in 2023, after adjusting for inflation, and that the unemployment rate will rise above 5% for the first time since 2021.
The CBO estimates that the national debt will reach unprecedented levels within a decade.
Images from Getty for the Peter G. Peterson Foundation
The CBO attributes the anticipated slowdown in economic growth to the Federal Reserve’s efforts to curb inflation by increasing interest rates.
The latest prediction could inflame the dispute between Republicans on Capitol Hill and President Biden over taxes, spending, and the debt ceiling increase.
Several Republican members, including House Speaker Kevin McCarthy (R-Calif.), have signaled that they will not vote to raise the debt ceiling – which restricts the amount of money the government can borrow to meet its commitments – until the president, who is 80 years old, agrees to spending cuts.
Phillip Swagel, director of the CBO, suggested in a letter that changes in fiscal policy are required to address the rising cost of interest.
“The warning is that the fiscal trajectory is unsustainable,” Swagel told reporters about the CBO’s updated forecasts on Wednesday, adding that it will be nearly impossible to alter the fiscal trajectory and balance the budget in 10 years without adjustments to Social Security and Medicare.
Swagel stated, “It is mathematically doable, but it is very, very difficult.”