Home Economy The federal debt will grow to 1.5 times the total economy, the CBO projects

The federal debt will grow to 1.5 times the total economy, the CBO projects

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         The federal debt will grow to 1.5 times the total economy, the CBO projects

The Congressional Budget Office raised its projection of where federal debt held by the public will go over the next few decades if current spending and tax laws stay the same, saying such growing debt would increase the likelihood of a fiscal crisis.

In its new long-term budget outlook, the nonpartisan CBO said debt would reach 150% of gross domestic product in 2047. In January, the CBO said it would reach 145% that year. The change primarily stems from higher projected spending toward the end of the 30-year period, CBO said.

Federal debt held by the public is now 77%, the highest level since shortly after World War II.

The report arrives as lawmakers are wrangling over a new spending bill to keep the government operating past the end of April, and as President Donald Trump and the Republican Congress are planning to move forward with a tax overhaul. Depending on the composition of the plan, the debt could be further impacted.

CBO predicts spending as a share of GDP will rise for Social Security, Medicare and interest on the government’s debt.

During the presidential campaign, Trump said he would leave programs like Medicare and Social Security untouched.

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