Four Key Takeaways from the CBO Long-Term Outlook
Last Updated March 31, 2017
Yesterday the nonpartisan Congressional Budget Office released the 2017 Long-Term Budget Outlook, highlighting the significant fiscal challenges facing our nation.
Here are four key takeaways from our analysis of the CBO report:
1. Federal debt is already at its highest level since 1950 and is projected to climb to 150 percent of GDP under current law by 2047 — by far an all-time high.
2. Rising debt is a result of a structural imbalance between revenues and spending. Under current law, spending growth, which is fueled primarily by the aging of the population and growing healthcare costs, significantly outpaces the projected growth in revenues.
3. As the debt grows and interest rates rise, interest costs are projected to increase rapidly. By 2028, interest will become the third largest category of the budget, behind only Social Security and Medicare.
4. Rising debt will harm our economy and slow the growth of productivity and wages. On our current path, the annual average income loss for a 4-person family would be $16,000 by 2047.
The good news is that it’s not too late to adjust course, and the sooner we get started, the easier it will be to fix. To learn more about bipartisan policy options, visit our Solutions page.
Image credit: Photo by Chip Somodevilla/Getty Images
Further Reading
Long-Term Budget Outlook Leaves No Room for Costly Legislation
As lawmakers consider costly legislation to extend expiring tax provisions this year, CBO’s latest projections serve as a warning that our fiscal outlook is already dangerously unsustainable.
Moody’s Warns Recent Policy Decisions Worsen U.S. Fiscal State, Maintains Negative Outlook Rating
Moody’s says that the United States is in fiscal deterioration, warning that government policy decisions in the near term could contribute to higher interest rates and worsening national debt.
National Debt Would Skyrocket Under TCJA Extension
New analysis released from the nonpartisan CBO shows deficits doubling and debt skyrocketing under a scenario where the expiring provisions of the Tax Cuts and Jobs Act were made permanent.