CBO Published Its Most Recent Budget Projections in January

Cover your eyes and hold your nose.

According to the CBO (Congressional Budget Office), which is a non-partisan organization that is tasked with providing analysis for the US Congress, the United States is expected to spend nearly $1.8 trillion PER YEAR on net interest by 2035, and $4.8 trillion per year on net interest by 2055.

Net interest - the cost of servicing the nation's growing debt load - came in at $881 billion in 2024. This is an alarmingly high number, though things are projected to get much worse in the years ahead, barring some unforeseen changes.

The CBO estimates that by 2035, the United States will have over $10.7 trillion in outlays.

Of this number, $6.626 trillion will be for mandatory spending, $2.322 trillion will be for discretionary spending and $1.783 trillion will be for net interest expense.

With revenues expected to come in at roughly $8 trillion in 2035, this would leave us with a deficit of $2.7 trillion for the 2035 fiscal year.

Deficits are expected to decrease slightly over the coming years, with a drop from $1.907 trillion in the recently close FY2024 to a "low" of $1.687 trillion in 2027.

After that, the deficits are expected to march higher, topping out at $2.7 trillion in 2035.

As a percentage of the GDP, net interest currently clocks in at 3.1%.

By 2035, net interest is expected to account for 4.1% of the nation's GDP.

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Over the even longer-term (2036 to 2055), the Congressional Budget Office sees net interest as a percentage of GDP continuing to grow.

By 2055, the CBO estimates that 5.4% of the GDP of the United States will be spent on net interest every year.

This is a little less than Social Security (estimated 5.9% of GDP by 2055) and more than Medicare (estimated 5.1% of GDP by 2055).

The CBO estimates that by 2055 the United States government will be spending $4.8 trillion per year on net interest.

Source: CBO.gov - Budget and Economic Data

Filed under: General Knowledge