CBO Projects U.S. Debt Increase $23.9 Trillion

The Congressional Budget Office (CBO) projects that the U.S. national debt will surge by $23.9 trillion over the next decade, not accounting for potential tax cuts proposed by President-elect Donald Trump, which could add trillions more. Annual budget deficits are expected to remain high, reaching 6.1% of GDP by 2035, compared to a historical average of 3.8%. While higher taxable incomes may alleviate some pressure on the debt, significant increases in entitlement costs like Social Security and Medicare are forecasted to exacerbate the deficit situation. The incoming Republican administration faces a challenging fiscal landscape, particularly as Trump’s proposed tax cuts, set to exceed $4 trillion, could further widen the deficit unless matched by substantial spending cuts. Current projections indicate that the deficit for the current fiscal year will be $1.87 trillion, slightly lower than last year’s $1.91 trillion. The forecast raises concerns about a persistent gap between government revenues and spending, highlighting a potential economic dilemma ahead.