U.S. debt is on track to be almost double the size of the U.S. economy by 2037, according to the nonpartisan Congressional Budget Office (CBO). The outlook is based on an extension of current tax rates, and takes into consideration increased spending on health care & entitlement programs. The House Budget Committee reviewed CBO’s findings and questioned its Director Douglas Elmendorf.
On Tuesday, the Congressional Budget Office (CBO) released an updated long-term budget outlook projecting the grim consequences of the growing federal deficit. According to one CBO budget scenario, federal debt would exceed the GDP by 90% in 2022 and would approach 200% in 2037. This assumes that Bush-era tax cuts are extended and cuts to Medicare payments for physicians are put off until 2022, among other "current" spending policies that are likely to continue due to the Congressional impasse over the budget.
The CBO points to increasing entitlement spending, based on projected "baby boomer" retirements, and declining revenues, due to the slow economic recovery and ongoing tax cuts, as the drivers pushing the burgeoning federal deficit.
Republican and Democratic leadership on the Budget Cmte. were quick to cite the CBO estimates in support of their parties' positions on the deficit. "The President’s policies are not working," chairman Ryan said in a press statement. "The sobering reality of our economic challenges require leadership and action."
The CBO report, ranking member Rep. Chris Van Hollen (D-MD) wrote in his press statement, "reinforces the fact that Congress must act now to put Americans back to work, rebuild our economy, and put in place a balanced plan to reduce the deficit."