Today, the non-partisan Congressional Budget Office (CBO) released its 2018 Long-Term Budget Outlook, highlighting the significant fiscal challenges facing our nation.
Here are four key takeaways from the report:
1) Federal debt is already at its highest level since 1950 and is projected to climb to 152 percent of GDP under current law by 2048 — by far an all-time high.
2) Rising debt is the result of a structural imbalance between revenues and spending. Under current law, spending growth, which is fueled primarily by the aging of the population, rising healthcare costs, and mounting interest payments will significantly outpace the projected growth in revenues.
3) As the debt grows and interest rates rise, interest costs are projected to increase rapidly. By 2026, interest will become the third largest category of the budget, behind only Social Security and Medicare. And by 2048, interest is projected to be tied with Social Security as the largest category.
4) Rising debt will harm our economy and slow the growth of productivity and wages. To stabilize the debt, changes should be enacted as soon as possible; on our current path, waiting just five years raises the cost of stabilizing the debt by 21 percent.
The good news is that it’s not too late to adjust course, and the sooner we get started, the easier it will be to fix. To learn more about bipartisan policy options, visit our Solutions page.