CBO Forecasts Federal Deficits and Debt to Rise to 120% of GDP by 2035

The nonpartisan Congressional Budget Office projects deficits and public debt to climb over the next decade, reaching 120% of GDP by 2035. The 2026 deficit is about $100 billion higher, and cumulative deficits from 2026-2035 are $1.4 trillion larger than last year’s forecast, as higher spending on Social Security, Medicare, and debt service crowd out infrastructure and education investments. Higher tariffs raised federal revenue by $3 trillion through 2029 but also fueled inflation. Inflation is expected to average 2% through 2030. With the 2026 federal deficit reaching record levels, experts warn of urgent action to raise revenue, cut major spending growth, and slow cost drivers to avert further market and economic risks.