The United States is on a pace to add nearly $19 trillion to its national debt over the next decade, according to a new report from the Congressional Budget Office released today, Wednesday, February 7.
The budget office projected that the annual deficit will grow to $2.6 trillion in 2034 from $1.6 trillion this year, adding $18.9 trillion to the national debt during the decade. By then, the debt is projected to surpass $54 trillion.
Interest rates have surged to two-decade highs over the past year, making borrowing costs an increasingly significant contributor to the national debt. From 2024 to 2034, the United States will spend more than $12 trillion alone on interest costs. Starting next year, net interest costs will be larger as a share of the U.S. economy than at any time since the federal government started keeping records in 1940, according to the budget office.
Recently enacted legislation to curb federal spending and a U.S. economy that has been growing faster than expected are making the fiscal picture slightly less bleak. Annual deficits over the next decade are 7% smaller than the $20.3 trillion the budget office forecast last year.
In a statement released with the report, the budget office’s director, Phillip Swagel, said that even with the decline in deficits, the nation remained on track to rack up more debt as a share of its total economic output in 2034 than at any other time in its history.
Congress faces another deadline on March 1 to agree on federal spending legislation to keep the government open. Congress has made almost no progress on annual spending legislation since the last funding extension.
Treasury Secretary Janet Yellen told lawmakers on Tuesday that interest costs remained manageable as a share of the overall U.S. economy.