Congressional Budget Office’s grim Long-Term Fiscal Outlook was published today, and budget expert says we’re on a “dangerous path.”
by Committee for a Responsible Federal Budget
The Congressional Budget Office released its latest Long-Term Budget Outlook today, projecting the nation’s finances over the next 30 years. CBO projects that the debt held by the public will hit a new record share of the economy in just four years and grow to 166 percent of Gross Domestic Product (GDP) by 2054. (CFRB summary here.)
CBO also projects that the Social Security Old-Age and Survivors Insurance trust fund will be exhausted in 2033, the Medicare Hospital Insurance trust fund in 2035, and the Highway Trust Fund in 2028.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
This is yet another reminder that politicians put political priorities ahead of the long-term health of the country. There is no way to look at these eye-popping numbers without realizing we need to make a change. And yet we have lawmakers promising what they won’t do: I won’t raise taxes, I won’t fix Social Security, I won’t pay for all the things I do want to do. And so we continue on this dangerous path.
Despite some recent progress with the Fiscal Responsibility Act, our debt remains on an unsustainable trajectory. Even under current law, CBO projects debt will double as a share of the economy relative to pre-pandemic levels. And major trust funds supporting Social Security, highways, and Medicare face looming insolvency.
So far, the presidential campaign is not offering any hope – candidates need to be asked how they would fix Social Security, fix Medicare, and bring the debt back to manageable levels. Voters should not be satisfied without specific answers.
The scariest part of our grim fiscal outlook is rising interest costs. Those costs have already doubled as a share of the economy since 2015, and this year CBO believes interest will cost more than defense spending or Medicare. By 2053, interest costs will double again after becoming the single largest line item in the entire federal budget in 2051. This year, we will spend $870 billion on interest – more than all the federal dollars we spend on children – and that number will only grow from here.
For years, we’ve heard that our fiscal problems could be dealt with in the future before they get out of hand. Well, the future is now. Under the next presidential term, debt will hit a record share of the economy, interest costs will surge, and major trust funds will approach insolvency.
Pledges not to touch Social Security and Medicare are incredibly counterproductive, given CBO’s projections that those two programs will grow by 2.9 percent of GDP over the next three decades under CBO’s baseline and face looming insolvency under the law.
And talk of extending tax cuts or introducing new tax breaks and spending programs show that many politicians have their priorities backwards. We can’t even afford the spending we already have, for gosh sakes.
If this report isn’t an alarm bell, it’s hard to think of what would be. Washington needs to act soon to put the national debt on a sustainable path.
Originally published by the Committee for a Responsible Federal Budget. Republished with permission.
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