House Budget Committee Ranking Member Steve Womack (R-AR) issued the below statement following the Congressional Budget Office (CBO) release of The 2020 Long-Term Budget Outlook, which projects the debt held by the public will reach 195 percent of Gross Domestic Product (GDP) by 2050:
“Today’s release of CBO’s Long-Term Budget Outlook shows the serious consequences of the federal government continuing on its fiscally unsustainable path. According to CBO, if we do not make the tough choices to alter this trajectory, debt held by the public will skyrocket to 195 percent of GDP by 2050. This is by far the highest level of debt recorded in American history. A burden of this magnitude increases the risk of a financial crisis brought on by Washington’s failure to budget. Congress has an obligation to the American people to do its job. We must get back to regular order and correct our current course.”
Key Findings from the CBO Report:
- Debt: The long-term outlook shows the public debt more than doubling from 79 percent of GDP in 2019 to 195 percent of GDP by 2050. This is significantly higher than any previous debt burden in American history. Mandatory spending (including interest payments on the debt) is the sole driver of this growing debt burden. As a percentage of GDP, discretionary spending is projected to decline and revenues to grow. Both of these changes significantly improve the budget outlook, but not by nearly enough to offset unsustainable mandatory spending.
- Mandatory Spending: Increases from 12.9 percent of GDP in 2019 to 17.5 percent of GDP in 2050.
- Discretionary Spending: Declines from 6.3 percent of GDP in 2019 to 5.6 percent of GDP by 2050.
- Net Interest: More than quadruples as a percentage of GDP over the next 30 years, increasing from 1.8 percent of GDP in 2019 to 8.1 percent of GDP in 2050. By 2043, CBO projects spending for interest payments on the national debt will exceed all discretionary spending.
- Revenues: Increases from 16.3 percent of GDP in 2019 to 18.6 percent of GDP by 2050.