WASHINGTON: The U.S. national debt is projected to climb to about $64 trillion within the next decade as federal deficits remain elevated, according to a new 10 year outlook from the Congressional Budget Office. The nonpartisan budget office said annual shortfalls are expected to widen in coming years, with debt rising even as the economy is projected to keep expanding, reflecting higher interest costs and growing spending tied to an aging population.
The CBO forecast shows the federal budget deficit at about $1.9 trillion in fiscal 2026, rising to about $3.1 trillion by 2036. As a share of the economy, the deficit is projected at about 5.8% of gross domestic product in 2026 and 6.7% in 2036, with an average of about 6.1% over the decade. The projections assume current tax and spending laws and tariff policies remain largely in place.
Debt held by the public, a key CBO measure, is projected to rise from about 101% of GDP in 2026 to 120% of GDP by 2036, surpassing the prior post World War II high of 106% in 1946. In dollar terms, debt held by the public is projected to reach about $56.2 trillion by 2036. The CBO said debt as a share of the economy is on track to set new records in the next several years.
Treasury data show total federal debt outstanding was $38.62 trillion as of Feb. 11, 2026, including about $31.01 trillion held by the public and about $7.61 trillion in intragovernmental holdings. The CBO said rising net interest costs are a major factor in the worsening outlook, alongside increased spending for Social Security and federal health programs as more Americans retire and health costs continue to rise.
Deficit drivers and debt costs
The CBO said policy changes enacted in 2025 and incorporated into the baseline contributed to larger projected deficits. The agency estimated that the One Big Beautiful Bill Act, a tax and spending law that extended the 2017 individual tax cuts and reduced some social program outlays including Medicaid, would add about $4.7 trillion to deficits over the 10 year budget window. The CBO also incorporated effects from reduced immigration, which it said would add about $500 billion to deficits over the period.
Tariffs imposed under the Trump administration are projected to generate about $3 trillion in additional revenue over the decade, partially offsetting revenue losses and higher spending in the outlook. The CBO also factored in the law’s investment related incentives and larger tax refunds that it said would boost consumer spending and private investment in the near term, while higher deficits and a slower growing labor force weigh on longer term projections.
Compared with the CBO’s prior baseline, the updated forecast shows the fiscal 2026 deficit roughly $100 billion higher and projected cumulative deficits from 2026 through 2035 about $1.4 trillion larger. The agency said discretionary spending reductions play a smaller role in the overall trajectory than the projected rise in interest costs, which increase as the government borrows to finance annual gaps between spending and revenue.
Policy assumptions and government response
Net interest costs are projected to more than double over the forecast horizon, rising from about $970 billion in fiscal 2025 to roughly $2 trillion by fiscal 2035 and about $2.1 trillion by 2036. The CBO said interest is one of the fastest growing categories of federal spending in the projections, amplifying the effect of persistent deficits even when other spending growth is moderated.
The outlook drew a response from the White House, which said the CBO has underestimated economic growth in the past and argued that stronger growth would improve the fiscal picture. President Donald Trump has also repeatedly urged the Federal Reserve to reduce interest rates, saying lower borrowing costs would reduce federal debt service payments. The CBO projections include its own economic assumptions, including real GDP growth of about 2.2% in 2026 and a longer run pace near 1.8%. – By Content Syndication Services.