Finance
Federal Debt Spiral Puts US Future at Risk
Clear Facts
- The Congressional Budget Office projects federal spending will significantly outpace economic growth over the next decade.
- President Trump’s “One Big Beautiful Bill Act” is forecasted to result in a 0.7% average annual boost to real GDP and increase business investment by $1.1 trillion through 2034.
- Net interest, Medicare, and Social Security are the primary drivers of rising federal outlays, with combined costs expected to add trillions to the national debt.
The latest CBO report warns that federal outlays will reach $94.6 trillion from 2027 to 2036, outpacing projected revenues of $70.2 trillion.
This means the federal government would borrow nearly 26 cents for each dollar it spends, increasing America’s debt burden.
The CBO highlights that while Trump’s economic reforms offer short-term growth, they do not eliminate the long-term fiscal threats.
Reductions in marginal tax rates are expected to drive higher labor force participation, wage growth, and a 0.4 percentage point drop in the unemployment rate by 2026.
Still, federal deficits are projected to keep rising as outlays and revenues continue growing faster than the overall economy.
Net interest costs on the debt are estimated to reach over $16 trillion in the next decade, with a 7.5% annual growth rate.
Medicare spending will increase by 6.5% yearly to $18.5 trillion, while Social Security is set to climb 5.1% annually, reaching $22.5 trillion.
CBO Director Phill Swagel said,
“We are in a spiral now. It’s a slow spiral, but it’s still a spiral of rising debt and rising payments on the debt. The situation is unsustainable.”
Experts believe that only by growing the economy faster than the federal debt can the nation reverse this trend.
Without corrective action, the U.S. risks a persistent cycle of borrowing and ballooning debt service, leading to a future fiscal crisis.
The report encourages policymakers to focus on economic growth and cuts to entitlement and non-defense discretionary spending.
Let us know what you think, please share your thoughts in the comments below.
Jerrie Fleming
February 15, 2026 at 9:14 pm
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