During the first nine months of fiscal year 2023, the United States Treasury has reported a deficit of $1.4 trillion. The president of the Committee for a Responsible Federal Budget, Maya MacGuineas, has voiced her concern about the current borrowing rate of $5.1 billion per day during this fiscal year. She emphasized that the deficit for this year has already surpassed the entirety of the previous year’s deficit, with three months remaining.
Earlier this year, the U.S. Congressional Budget Office (CBO) released a report projecting that the national debt would nearly double the size of the U.S. economy within 30 years. The report states that by the end of 2023, the federal debt held by the public will equal 98 percent of GDP. This ratio is expected to continue rising, reaching 107 percent of GDP in 2029 and a staggering 181 percent of GDP by 2053.
The CBO further predicts that deficits will continue to increase. Based on their estimates, the deficit is expected to reach 5.8% of the GDP in 2023. However, it is predicted to decrease to 5.0% by 2027, but unfortunately, it is anticipated to increase annually thereafter. By 2053, the deficit is expected to reach 10.0 percent of GDP. The report notes that this deficit level has only been surpassed during significant events like World War II and the COVID-19 pandemic.
A previous report highlighted that the cost of interest payments on the national debt would exceed the funding for national defense within a decade. Federal spending trends indicate that interest payments will soon become the most significant expenditure of the federal government. In fact, a recent report by the Committee for a Responsible Federal Budget projects that by 2051, interest payments will surpass spending on Social Security, Medicare, Medicaid, and all other mandatory and discretionary programs.
Lawmakers have expressed concerns about this issue, but there has been little progress in implementing significant spending cuts to address the growing debt. Representative David Schweikert of Arizona emphasized that the federal government has borrowed $2 trillion in the past year alone, equating to $63,000 per second. He argued that it is unrealistic to ignore the consequences of mounting debt while the American working class bears the burden.
MacGuineas also warned that the trust funds supporting Medicare, Social Security, and highways are on the path to insolvency within the next decade. She emphasized the urgent need to reverse the declining fiscal health by reducing deficits and establishing a sustainable trajectory for the national debt.