Federal debt will double over the next 30 years if Congress doesn’t change taxes and spending, the Congressional Budget Office warned Thursday.
The office, Congress’ official in-house group of budget experts, said the federal debt held by the public is set to rise from about 77 percent of the economy today to 150 percent by 2047, slowing economic growth and risking a fiscal crisis.
The budget office has published such warnings regularly in recent years. Thursday’s report, for 2017, was mostly the same as last year’s, with only slightly more debt projected over the long term. The CBO made sure to note that forecasting that far out in the future is very uncertain.
Government spending will rise, according to the budget office, in large part because of growth in Social Security, healthcare programs, and interest on the debt.
The aging population will increase spending on retirement programs such as Social Security and Medicare. Meanwhile, high growth in the cost of healthcare, relative to the economy as a whole, will mean greater spending through programs such as Medicare, Medicaid and Obamacare subsidies.
The anticipated levels of debt, the budget office wrote, would “limit lawmakers’ ability to respond to unforeseen events … and increase the likelihood of a fiscal crisis.”
Apart from any fiscal crisis, one major problem facing the U.S. is that growing spending on entitlement programs like Social Security and Medicare, for which people qualify automatically, is crowding out all other government spending, including defense, law enforcement, infrastructure, job training, and much more.
Spending on Social Security and Medicare has risen to more than half of all non-interest spending, and is headed toward two-thirds.
Just to keep the debt stable, lawmakers would have to reduce the deficit by about $380 billion a year starting in 2018, the CBO calculates. Deficit reduction could be spending cuts, tax hikes, or both.
The projections released by the budget office Thursday concern the long-term trajectories of federal spending, taxation and debt. They are separate from the 10-year budget estimates published in January.
