Congressional Budget Office Director Keith Hall warned Congress on Thursday that the national debt is on an unsustainable course, and that improved economic growth alone isn't enough to dodge a debt crisis.
"Growth will help," Hall told the House Budget Committee. But he then added, "We're so far behind, it's hard to imagine that just growth is going to fix this deficit and debt problem."
Even if growth could be enough, the CBO isn't projecting anything beyond 2 percent growth over the next decade.
CBO's projections expect another $9.4 trillion in debt to be added to the $19 trillion in debt over the next decade. He said piling on more debt would at some point make it much more difficult for the U.S. to borrow from countries, which would start demanding higher interest rates.
"Over [the] next 10 years, we could see debt go from 74 percent of [gross domestic product] to 86 percent, then eventually to 155 percent over 30 years, which is a really high number," he said in response to a question from Rep. Bill Johnson, R-Ohio.
"And so, that's really the concern," he added. "At some point along this trajectory, we're going to get people starting to be unsure about investing in U.S. securities, and demanding a higher interest rate. Then we have issues with financial markets."
"We're going down a slippery slope?" Johnson asked.
"We are," Hall said.
That goes against the Obama administration's argument that the government is on the right path, since the annual budget deficit has fallen by $1 trillion compared to Obama's first term. But the CBO said that while the deficit has dropped to around $500 billion a year, it's growing again, and will soon exceed $1 trillion annually.
Republicans pressed Hall to agree that spending is the problem, not revenues, especially given the government is taking in more money than ever, and tax revenue should grow. As expected, Hall, remained neutral on the topic, and said it's up to Congress to decide whether tax hikes, spending cuts or both are needed.
But Hall did admit that spending is a real factor. When Rep. Jim Renacci, R-Ohio, asked if spending is the real problem, Hall replied by citing two major spending problems.
"The big growth in the deficit is from Social Security and spending on major healthcare programs," he said. "Those are the two big-ticket items that are creating this problem going forward."
Renacci then asked if the growth in the debt is sustainable.
"It's not," Hall said. "What's tricky about it is, it's getting to a very, very high level, trajectory's all wrong, but I can't tell you exactly what's too much."