The federal deficit is projected to increase from $1.6 trillion in 2024 to $2.6 trillion in 2034, according to the Congressional Budget Office outlook released Feb. 7.
"Measured in relation to economic output, deficits during that period are about 50% larger than their historical average over the past 50 years," CBO Director Phill Swagel, PhD, said in a Feb. 7 statement.
Dr. Swagel said net interest costs are a major contributor to the deficit, adding that their growth is equal to about three-quarters of the increase in the deficit from 2024 to 2034.
Also boosting costs are two underlying trends: the aging of the population and growth in federal healthcare costs per beneficiary.
"Those trends put upward pressure on mandatory spending," he said.
From 2024 to 2033, the deficit is about 7% smaller than the CBO projected last year, he said. Dr. Swagel attributed that primarily to the Fiscal Responsibility Act of 2023 and subsequent continuing resolutions.
"Together, those laws reduce the growth of discretionary spending," he said. "Including the effects on debt service, legislative changes reduce deficits by $2.6 trillion over the next 10 years."
He added the deficit is also smaller in this year's projections because economic output is greater, partly as a result of more people working.
Read the full report here.