Expert warns the US federal budget deficit could top $2 trillion by 2036 if unchecked
The federal budget deficit has been a matter of concern for America for many years now, and things are not getting any better. The government reportedly borrowed a whopping $308 billion last month alone, which has led to the federal deficit growing by around $1 trillion in the last five months, according to the Congressional Budget Office (CBO). Now, Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, has warned that this is simply not sustainable and the deficit could jump to over $2 trillion in just 10 years if left unchecked.
The 2026 fiscal year began in October last year, and from then till February, the Treasury has spent an additional $31 billion on net interest on public debt, compared to the previous year, as per a report in Fortune. In total, the department has had to shell out $433 billion in these five months to service public debt, which is now nearing a whopping $38.9 trillion. While that may seem like a large amount, the government has actually borrowed $142 billion less than it had at the same time last year, when the fiscal year was partly under the Biden administration. However, the Congressional Budget Office (CBO) said interest outlays increased because the overall debt was larger than it was during the first five months of fiscal year 2025, and long-term interest rates were higher. “Declines in short-term interest rates partially mitigated the overall rise in interest payments,” the CBO added.
Maya MacGuineas addressed this very issue, claiming interest payments on the debt are expected to exceed $1 trillion this year. However, her next prediction was even more worrying, as she insisted that the budget deficit would surpass $2 trillion by 2036 if federal borrowing isn’t checked. Hence, it's pretty apparent that something has to be done, and fast, to improve the situation.
“This cannot be sustainable,” MacGuineas said as per the Fortune report. “Our fiscal problems will not solve themselves. We need policymakers to come together, agree to reduce deficits—a 3% deficit-to-GDP target would be a great start—and put our national debt on a downward sustainable path as a share of the economy.” That said, the amount of debt is not nearly as concerning as the deficit-to-GDP ratio, which measures a nation’s borrowing against its growth.
If debt outpaces GDP, a country’s growth can come under peril as the government would have to dole out massive amounts of cash each year just to pay off the interest. While MacGuineas believes that a 3% deficit-to-GDP ratio would be ideal, the figure has sat between 5% and 6% in recent years. This year, several departments have seen a rise in spending, including the Department of War and the Department of Veterans Affairs.
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