CBO Projects Public Debt at 120% of GDP by 2036 as Interest Costs Surge
CBO projects debt held by the public will reach 120% of GDP by 2036 and net interest costs will be about $2.1 trillion that year, raising risk of a fiscal spiral.
Overview
The Congressional Budget Office projected in its 2026–2036 outlook that debt held by the public will reach 120% of GDP by 2036, CBO said.
CBO projected deficits will rise from an estimated $1.9 trillion in fiscal year 2026 to $3.1 trillion in 2036 as outlays and interest costs outpace nominal GDP growth, CBO said.
The Committee for a Responsible Federal Budget warned average interest rates could exceed nominal growth and begin a "debt spiral," and National Taxpayers Union President Pete Sepp urged immediate action, they said.
CBO forecast gross federal debt will climb from about $39.4 trillion at the end of fiscal 2026 to $63 trillion in 2036 while public debt would rise to roughly $56 trillion, the report said.
The report projects net interest costs will more than double to about $2.1 trillion by 2036 and that Medicare and Social Security spending will add further pressure absent policy changes, CBO said.
Analysis
Center-leaning sources frame the story as an impending fiscal crisis by prioritizing alarming projections, using crisis language (e.g., 'debt spiral' and 'ominous milestone'), and foregrounding watchdog warnings. They emphasize rising interest costs and legal risks to tariff revenue while treating upbeat scenarios (AI-driven growth) as secondary caveats.
Sources (4)
FAQ
The CBO projects a federal budget deficit of $1.9 trillion in fiscal year 2026, rising to $3.1 trillion in 2036.
Net interest costs are projected to reach about $2.1 trillion by 2036, more than doubling from current levels.
Deficits are rising as outlays and interest costs outpace nominal GDP growth, with Medicare and Social Security adding pressure absent policy changes.
The OBBBA is estimated to add $4.2 trillion to $4.7 trillion to the national debt over the next decade on a dynamic basis.
Average interest rates could exceed nominal growth, leading to a debt spiral, and high debt limits responses to crises.
History
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