US debt expected to balloon, CBO says. Here’s what to know

The United States’ national debt is set to balloon to $64 trillion over the next 10 years, the nonpartisan Congressional Budget Office (CBO) said on Wednesday, citing a jump in annual deficits that owes in part to tax cuts enacted by President Donald Trump.

The federal deficit — the annual gap between government spending and revenue — is expected to rise from $1.9 trillion in fiscal year 2026 to $3.1 trillion in 2036, the CBO found in its 164-page report. Forecasted revenue losses caused by Trump’s signature tax cut will more than offset $3 trillion in funds to be generated by newly imposed tariffs, the CBO said.

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The CBO also projected an increase in debt held by U.S. bondholders. Debt held by the public is expected to rise from 101% of GDP in 2026 to 120% in 2036, putting it well above the previous record of 106% in 1946, the CBO said.

The U.S. has run up more than $37 trillion in debt, federal data shows. In 2023, the CBO said the federal debt would grow by another $20 trillion by the end of 2033. That assessment arrived before Trump’s spending measure, which is set to add trillions more to the debt, according to the CBO.

The CBO is a budget scorekeeper that provides analysis for members of Congress. The Office of Management and Budget, on the other hand, is a White House agency that oversees the federal budget.

Trump has repeatedly called on the Federal Reserve to lower rates, saying the move would reduce U.S. debt-service payments. In a social media post on Wednesday, Trump reiterated that view.

“The United States of America should be paying MUCH LESS on its Borrowings (BONDS!),” Trump said.

It’s been more than 20 years since the federal government’s last budget surplus, which occurred in 2001. Every year since then, the U.S. has spent more money than it has brought in, deepening the nation’s financial hole.

The rising federal debt is expected to push up interest rates as the government issues larger and larger amounts of Treasury bonds. As a result, creditors would likely demand higher yields amid a perception of increased risk that the U.S. would not repay.

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Last May, Moody’s, a top ratings agency, cut the U.S. credit rating, dropping it one notch from the top rating of Aaa to a lower classification of Aa1.

Moody’s credit reassessment came years after similar downgrades of U.S. debt at the two other major credit agencies: S&P in 2011 and Fitch in 2023.