WASHINGTON (NEWSnet/AP) — Congressional Budget Office is giving the world a concerning look at the U.S. government's ledgers: higher deficits, greater government spending and tax revenue that begins to increase only when existing tax cuts expire.

In its latest 30-year outlook, the nonpartisan agency estimates publicly held debt will be equal to a record 181% of American economic activity by 2053. That compares with a projected 98% at the end of this budget year, a sign the government is getting more dependent on debt to pay for Social Security, Medicare, the military, infrastructure and programs that benefit millions of households.

The higher debt load is not all that shocking given the deficit spending of the past two decades. But the CBO figures do offer a bit of comfort in that annual deficits after 2042 are lower than forecasted in the agency’s report from 2022. This is because the primary borrowing and interest rate costs are lower than what the CBO model year showed at that time.

There is a clear warning lawmakers will be constrained as spending increases after 2026, driven largely by increased health care and Social Security expense tied to an aging population and a projected lower labor force participation rate of 60.3% in 2053, from 62.2% currently.

 

Revenue also is expected to increase after 2026. That’s due largely to increased individual income tax receipts after tax cuts under President Donald Trump are set to expire after 2025.

For 2023, CBO projects that debt, measured as a percentage of the gross domestic product, this year will be 2 percentage points higher compared the estimate in last year’s long-term budget impact report.

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