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CBO Predicts Debt Will Rise to 155 Percent of GDP in Next 30 Years

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WASHINGTON, Jan. 19, 2016 /PRNewswire-USNewswire/ — The Congressional Budget Office (CBO) released projections [Tuesday] that show the federal deficit rising this year for the first time since 2009 and the government sinking deeper into debt over the next decade, a problem that The Concord Coalition says every candidate for federal office should address in this year’s political campaigns.

“Budget projections have turned a corner again, and this time it’s for the worse,” said Robert L. Bixby, executive director of The Concord Coalition. “Today’s CBO numbers clearly demonstrate that recent legislation combined with the relentless fiscal pressures of an aging population add up to steadily rising debt from this point forward. Each of the presidential candidates should explain to voters how they would work to reverse this dynamic or admit that they support the ‘Do Nothing’ plan.”

A summary of CBO’s annual Budget and Economic Outlook, released [Tuesday] morning, projects that under current law federal deficits — which have dropped in recent years — will begin rising again this year to $544 billion (2.9 percent of GDP) and could reach $1.4 trillion by 2026 (4.9 percent of GDP).

The deficits projected over the next decade would add a total of $9.4 trillion to the nation’s debt. Compared to the CBO’s last outlook, the projected deficit total over the same 10-year period has grown by $1.5 trillion.

The CBO plans to release the full report Monday but said it was releasing the summary early this year to help Congress work on its forthcoming budget resolution.

The summary takes into account legislation that Congress passed late last year, including tax legislation that will drain federal revenue by $425 billion and another $324 billion in spending increases that add to deficits over the next 10 years. Lawmakers made no real effort to offset the deficit increases.

“Unfortunately, the short-term drops in the deficit in recent years have created a sense of complacency inWashington over further borrowing,” Bixby said. “While the CBO each year warns of fundamental problems in the federal budget, it is particularly distressing to see the confirmation in today’s report of how much elected officials worsened the fiscal picture with legislation approved just weeks ago.”

Key drivers of the projected deficits are the aging of the population and rising health care costs, both of which boost spending on the big federal entitlement programs each year. The CBO projected that almost half of the$2.5 trillion increase in spending over the next 10 years is for Social Security and Medicare.

Although the CBO report focuses on the next decade, the budget office suggests such pressures will lead to the debt rising to 155 percent of GDP over the next 30 years.

Federal debt held by the public is already high by historical standards relative to the size of the U.S. economy. The budget office says such debt will climb from about 76 percent of GDP at the end of this year — the highest amount since World War II — to 86 percent at the end of 2026. CBO expects a “substantial increase” in net interest spending.

“The rising debt means more and more tax dollars must be spent simply on interest payments, cutting into the money available even for high national priorities,” Bixby said. “In addition, high government debt can hobble the economy, put upward pressure on tax rates, raise the risks of instability and crisis in the financial markets and undermine America’s position of global leadership. Worst of all, without fiscal reform, we could unfairly pass an enormous burden of debt on to our children and future generations.”

“Voters can expect to hear a lot of promises from political candidates this year,” Bixby added. “But we should expect those candidates to clearly explain how they would pay for their proposals while reining in the federal debt. So far many of the presidential candidates have fallen short.”

The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility. Since 1992, Concord has worked to educate the public about the causes and consequences of the federal deficit and debt, and to develop realistic solutions for sustainable budgets.

 

SOURCE The Concord Coalition

RELATED LINKS
http://concordcoalition.org

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175 comments
William Griffin
William Griffin

Which is why we need more Democrats in Congress and White House. To prevent this from happening.

P Scott Schlitte
P Scott Schlitte

this is the never ending argument as it has become too big to fix. The president had a bipartisan commission come up with a plan of 3 parts cuts to one part tax increase but then no one in congress would agree - neither side wanted cuts to their pets and one side wanted no tax increases. Both sides keep coming up with ideas that cost money but rarely with the way to fund them. In the end no matter which side gets elected little changes beyond speech rhetoric

Glenn Scott
Glenn Scott

James Robertson you don't believe that Reagan and Pappa Bush handed over the Keys to the White House with almost all the debt paid off. They created it. Clinton and the Republican House and Congress worked together to fix it. Baby Bush and this President Obama have put us way in debt, again! Heaven helps us with what we have to choose from so far to fix this Country! Big Business is crippling the system for profit! Greed is one of the 7 deadly Sins. As is pride!

James Robertson
James Robertson

I didn't think states were allowed to have deficits?

Ben Jones
Ben Jones

WOO WOO !! TRUMP TRAIN COMING THROUGH !!!!

Sanford Heath
Sanford Heath

No. If we raise the minimum wage it will immediately raise tax revenues. Then if we spend wisely and reduce the military budget the deficit will come down as it has in the last 8 years. Oh and stay out of wars we have no business fighting.

Faye Wells
Faye Wells

Jerry E Jr Wilson , your ignorance of how the funding works and who can use it is alarming. But you just hang in there with the good old boy party, and believe everything they tell you. Don't ever look up anything for yourself! Don't ever think for yourself! Don't you dare stop believing that everything is Obama's fault!

Michael Mckee
Michael Mckee

How about what they are going to replace Obama care with?

Wendell Harvey
Wendell Harvey

This debt crisis will take a lot of creative work and thinking,but or nation has plenty of this and we CAN get a handle on this awesome problem.We cannot afford to poor mouth ourselves into defeat: TRUMP in 2016...

Frank Bermudez
Frank Bermudez

Lots of good suggestions. However let's remember social security is designed to be self sustainable, yes it needs some reform!

Frank Bermudez
Frank Bermudez

Unfortunately it doesn't work that way, that's why it's called public debt\U0001f626 yes, the government created it and we the people are responsible for it!

Daric McKonly
Daric McKonly

I didn't spend the $$$$$$$ so I have no part in it.

Christine Hunt
Christine Hunt

Right now it is at 3%. Tax all companies that leave US soil and we will have jobs, a tax base for our communities. That is the problem.

Austin Hacker
Austin Hacker

Only if we the people let it happen. I've got an idea though... Let's sack up and take our country back!

Jerry Dougherty
Jerry Dougherty

And who voted in the communist, socialists who squandered all our $$? The goverment IS us.

Janet Stone
Janet Stone

Yes,i agree! This has been an sore issue since this race started,no solution's to how our concerns are going to be meet and paid for.

Willie Forst
Willie Forst

government made this debt all by themselves --let them pay it --all by themselves---take their retirement and 1/2 their wages-let them get the money they gave to every country but ours---ok government pay it back

Brenton C Smith
Brenton C Smith

The projections are 'current law' which imply that the 155% assumes significant benefit reductions to Social Security.

Emmanuel Stokes
Emmanuel Stokes

90% of the supply is created by the banking industry for home loans .another 6-8% by the fed to buy bonds ... every dollar in existance is created through a loan .... have you noticed the 18T dollars of debt thats what you are defending. Please explain how banks profiting from currency creation (an inheriently govt act) is better than the people of the U.S. benifiting from that power. I dont think you know exactly what you are talking about.

Brenton C Smith
Brenton C Smith

CBO projects that SS's Trust Fund will be exhausted in 2029, so this figure is based on the idea that there will be nothing in the Trust Fund to borrow.

George Van
George Van

Put Donald Trump in the Presidency and that clock will start to run backwards for the first time since it's inception. To start to stop the bleeding of our money will be to cut the unchecked waste full spending and then every country we are performing security for like Korea and Saudi Arabia will be starting to pay us for that service or we will simply just pack up and pull out. Then there is the billions we have been giving away to countries all around the world who don't even like us, in fact they openly Hate us. WHAT ?? That's going come to a screeching halt the first full day in office. Do you think any other candidate will do that? Hell No ! They all have to do favors whether they admit it or not. Those Favors cost money, lots of money. There's only one way to take the bull by the horns and that is to put Donald Trump in there to take care of Business for the American Taxpayers. Donald Trump for President!!! ****************

Warren J. Guss
Warren J. Guss

Bernie intends to take back the EXCESSIVE profits from those who embezzled it from our country/ us and put it to good use as it should have been.

John Vick
John Vick

This debt INCLUDES the unauthorized borrowing of social security funds. A lot of this is owed to US.

Gabe Higgins
Gabe Higgins

He's not the only candidate, and his 'plan' doesn't balance the budget. It's unclear what he would actually do.

Colter Terry
Colter Terry

Reign in corporate corruption and greed and this will be fixed real quick!

Jeffrey Joyce
Jeffrey Joyce

This is why we need Bernie Sanders' Tax Code. It's no where close to the imagined nightmare of a 90% marginal tax rate, in his code its only a little over 50% for earners over 10 Million dollars. Either that or we gotta cut the military in half or something.

Kenneth A Schmalbach
Kenneth A Schmalbach

The USA will drown itself in debt if and kill all its citizens if we do not shift from a capitalist society to a socialist. We need to build up America and spend money on America or there will no no America left

Harry Simon
Harry Simon

No it won't . We will collapse long before then .

Lisa Bragg
Lisa Bragg

The national debt always rises when more money is placed in the hands of fewer and fewer people. There is no way an economy can survive under plutocratic oligarchy (or is it oligarchical plutocracy?)

Faye Wells
Faye Wells

I am not worried about the national debt....I am worried about the theft of the United States Congress by the Koch Brothers!

Myk Halibut
Myk Halibut

Worthless fiat currency, no surprise when the government has a monopoly on monetary policy.

Myk Halibut
Myk Halibut

The government already has a monopoly on monetary policy, and look how great that's been working.

Myk Halibut
Myk Halibut

Just print more money, been working so far.

Matt Dixon
Matt Dixon

Oh good those are much better arguments and worthwhile reasons to oppose a candidate. As a libertarian I agree with most of those actually. His view on marriage is that it's a legal contract so it doesn't matter the gender (different from his previous views I know but changed for the better). The white supremacist/civil rights argument is one of the common arguments directed at libertarians because we oppose government regulations for business. So of course the talking heads always jump to "what about segregation???" Libertarianism assumes a certain degree of social evolution so that this wouldn't even be an issue, however that isn't the world we live in. Rand actually said a couple weeks ago that certain social laws like segregation he wouldn't change. The rest of those are common libertarian platforms to which there is plenty of information available as to why we support those views.

Funkin Imgood
Funkin Imgood

Trump can pay out of his own pocket if he really cares. That's a sure way of winning.

James Derek Bush
James Derek Bush

Separate the oligarchy from the right to make decisions for all!

Cathey Hawkins
Cathey Hawkins

Chase Tamura While we all know there is a big issue with the inequity of the wealthy and the corporations, that is not our only issues. What about the over site of the welfare and the food stamp programs. Because I can assure there is not enough over site. There is way to much abuse of those programs. Miss use of Medicare by unscrupulous people. So where does Mr .Sanders stand on these issues. Because just focusing on the wealthy and the corps is NOT enough...

Mickey Snyder
Mickey Snyder

If we don't fix our Political Problem soon, China will Own the USA & they will become the soul Owners of our Debt. Or something like that. LOL

Dennis Thomas
Dennis Thomas

Chase Tamura, agree. However, they are only related by the fact that Bernie will audit the department of defense and other agencies to result in locating $billion in waste and fraud. Thus, reducing costs and preventing unnecessary debt.