The nation’s annual budget deficits are projected to average $2 trillion over roughly the next decade, according to figures released by the Congressional Budget Office (CBO) on Wednesday.
In the recent 2023-2033 “Budget and Economic Outlook” report, the CBO projected the federal budget national deficit would reach $1.4 trillion for fiscal year 2023, $400 billion higher than its May 2022 estimate.
Subsequent deficits are also projected to generally rise in the coming years, with an estimated shortfall of $2.7 trillion in 2033, the report said.
“Federal debt held by the public is projected to rise from 98 percent of GDP in 2023 to 118 percent in 2033—an average increase of 2 percentage points per year,” the report stated.
“Over that period, the growth of interest costs and mandatory spending outpaces the growth of revenues and the economy, driving up debt. Those factors persist beyond 2033, pushing federal debt higher still, to 195 percent of GDP in 2053,” it adds.
The data comes as Washington remains largely divided over spending amid a looming threat over the nation’s debt limit, which limits how much money the Treasury can borrow to pay the government’s bills.
Last month, the Treasury Department announced what it described as “extraordinary measures” to keep the U.S. from defaulting on its debt, after the national debt reached the roughly $31.4 trillion limit set by Congress more than a year ago.
Republicans press for significant fiscal reform to be tied to any legislation raising the limit, but both parties are finding difficulty agreeing on how to tackle the nation’s deficits. Republicans have proposed steep cuts to spending, particularly in nondefense areas of the budget that Democrats are likely to take issue with.
At the same time, Republicans have opposed tax increases pushed by Democrats aimed at targeting higher-income earners and corporations.
While it’s hard to lock down the so-called “X” date when the nation could default, the CBO estimated on Wednesday that the Treasury could exhaust its emergency measures between July and September. Estimates are expected to be more exact the closer the nation approaches the date.
Democrats have pressed for Congress to raise the limit without conditions, while proposing carrying on with bipartisan talks separately on ways to curb spending. But Republicans are ramping up pressing on Democrats for spending reform, while also working to unify its party on potential cuts as divisions emerge over ways to tackle defense spending.
Fiscal watchdogs are also dialing up the heat on Congress to come to a bipartisan solution on spending, particularly as CBO projects the debt subject to limit will continue to rise significantly in the years ahead, potentially climbing to more than $50 trillion in 11 years.
“It’s time for policymakers to stop grandstanding and demagoguing these important issues and wake up to the reality: we will need to make changes to spending on Social Security, Medicare, and other programs, and we need to raise the necessary revenue to fund them,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement.
“Everything should be on the table to get our unsustainable fiscal problems under control,” she added.