US National Debt Projected to Reach Record 120 Percent of GDP by 2036

The Congressional Budget Office (CBO) warned on Wednesday that federal debt is on track to reach 120 percent of economic output within a decade, surpassing the previous record of 106 percent set in 1946. The nonpartisan scorekeeper’s annual forecast projects the national debt will hit $64 trillion by 2036, with the annual deficit growing from $1.9 trillion this fiscal year to $3.1 trillion over the next ten years. This fiscal trajectory puts the economy at risk of a destabilizing debt crisis.

The report indicates that a tax and spending package enacted last summer, along with new immigration policies, will increase deficits by trillions of dollars. These costs are projected to be partially offset by approximately $3 trillion in revenue generated by tariffs. Specifically, the broad income tax cuts passed last year are estimated to cost $4.7 trillion over the next nine years, while the total nine-year shortfall is now expected to be $23.1 trillion.

President Donald Trump responded to the report on Wednesday by welcoming January's better-than-expected job growth and advocating for lower borrowing costs. In a social media post, Trump stated that the United States should pay the "LOWEST INTEREST RATE, by far" because it is the "strongest Country in the World." The President has also pressured the Federal Reserve to sharply lower interest rates as part of his broader economic strategy.