The nonpartisan Congressional Budget Office (CBO) said Thursday that weak population gains and increased government spending will result in slower overall economic growth over the next 30 years, according to the Associated Press.
The CBO’s latest long-term budget and economic outlook report — for a timeframe that spans 2025-2055 — projects publicly-held debt to reach 156% of gross domestic product (GDP) in 2055. That’s down from the agency’s March 2024 long-term budget projection, which said publicly held debt would be equal to a record 166% of American economic activity by 2054.
However, that’s not necessarily a positive.
The mix of slower population growth and unfettered spending will also result in weaker economic growth over the next three decades than what the CBO projected last year. Lower birth rates also mean that the United States is becoming more dependent on immigrants working to sustain growth.
The report assumes that all the laws set to expire, including certain provisions of Trump’s 2017 tax cuts, will expire. The White House and Republican lawmakers, however, have said that the tax cuts will be renewed and potentially expanded, and predicted reductions in government spending and an increase in revenues by taxing imports.
Still, the report’s warnings and its projections for the future also set the stage for the challenges on the debt, government spending and economic growth that Treasury Secretary Scott Bessent insists the Trump administration can fix. The treasury secretary has sought to discredit CBO scoring.
