In a new insight, Director of Fiscal Policy Jordan Haring walks through the Congressional Budget Office’s (CBO) latest Long-Term Budget Outlook and reviews what it reveals about debt levels.

Key points:

• The CBO’s Long-Term Budget Outlook projects that federal debt held by the public will rise from 99 percent of gross domestic product (GDP) at the end of Fiscal Year (FY) 2024 to 166 percent of GDP by the end of 2054.
• In a new report, CBO analyzed eight alternative scenarios and their impact on the long-term fiscal outlook: Six scenarios examined how changes in economic conditions affect the budget outlook and two looked at how changes in budgetary conditions impact it; under these scenarios, debt could be as low as 99 percent of GDP by the end of FY 2054 or as high as 307 percent of GDP.
• In all but one scenario, debt will continue to grow as a share of the economy over the long term; high debt levels slow economic growth and place upward pressure on interest rates.

Read the analysis