page_title: United States federal budget
section_title: Long-term outlook
hierarchical_section_title: United States federal budget / CBO budget projections / Long-term outlook
caption_attribution_description: English: Projection of US federal debt as a percentage of GDP
context_page_description: The United States federal budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. It has reported that large budget deficits over the next 30 years are projected to drive federal debt held by the public to unprecedented levels—from 78 percent of gross domestic product in 2019 to 144 percent by 2049.
  The United States has the largest external debt in the world and the 14th largest government debt as % of GDP in the world. The annual budget deficit increased from $585 billion in 2016 to $984 billion in 2019, up 68%. Relative to a CBO forecast prior to President Trump's inauguration, the budget deficits for 2019-2021 roughly doubled, due to the Trump tax cuts and other spending legislation.
context_section_description: The Congressional Budget Office (CBO) reports its Long-Term Budget Outlook annually, providing at least two scenarios for spending, revenue, deficits, and debt. The 2019 Outlook mainly covers the 30-year period through 2049. The "extended baseline scenario" assumes that the laws currently on the books will be implemented, for the most part. CBO reported in June 2019 that under this scenario: "Large budget deficits over the next 30 years are projected to drive federal debt held by the public to unprecedented levels—from 78 percent of gross domestic product (GDP) in 2019 to 144 percent by 2049. "
  Alternative scenarios assume something other than currently enacted laws. CBO reported in June 2019: "If lawmakers changed current laws to maintain certain major policies now in place—most significantly, if they prevented a cut in discretionary spending in 2020 and an increase in individual income taxes in 2026—then debt held by the public would increase even more, reaching 219 percent of GDP by 2049. By contrast, if Social Security benefits were limited to the amounts payable from revenues received by the Social Security trust funds, debt in 2049 would reach 106 percent of GDP, still well above its current level."
  Over the long-term, CBO projects that interest expense and mandatory spending categories (e.g., Medicare, Medicaid and Social Security) will continue to grow relative to GDP, while discretionary categories (e.g., Defense and other Cabinet Departments) continue to fall relative to GDP. Debt is projected to continue rising relative to GDP under the above two scenarios, although the CBO did also offer other scenarios that involved austerity measures that would bring the debt to GDP ratio down.
  CBO reported in September 2011: "The nation cannot continue to sustain the spending programs and policies of the past with the tax revenues it has been accustomed to paying. Citizens will either have to pay more for their government, accept less in government services and benefits, or both."
caption: Projection of US federal debt as a percentage of GDP
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