WASHINGTON (Reuters) – The Congressional Budget Office said on Wednesday that U.S. deficits and debt will grow considerably over the next 30 years as interest costs mount, but the outlook had improved from forecasts made last June due to spending limits passed by Congress and stronger projected economic growth.
The CBO’s latest long-term budget projections show federal deficits rising to 8.5% of gross domestic product in fiscal 2054 from 5.5% in fiscal 2024. The CBO in June projected the fiscal 2053 deficit at 10.1% of GDP.
The projections also show that U.S. public debt will climb to 166% of GDP in 2054 from 99% in 2024, but this is down considerably from the June projection of 2053 debt at 181% of GDP.
The reduction, according to the non-partisan budget referee agency, is partly because Congress has passed two measures limiting the growth of spending on discretionary programs, including defense and government agency budgets.
The projections assume no changes to current tax and spending laws for the next 30 years, and include the effects of individual tax rates reverting to higher levels at the end of 2025.
(Reporting by David Lawder; Editing by Richard Chang)
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