The 2018 Long-Term Budget Outlook

Abstract

At 78 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II. If current laws generally remained unchanged, CBO projects, growing budget deficits would boost that debt sharply over the next 30 years; it would approach 100 percent of GDP by the end of the next decade and 152 percent by 2048. That amount would be the highest in the nation’s history by far. Moreover, if lawmakers changed current law to maintain certain policies now in place—preventing a significant increase in individual income taxes in 2026, for example—the result would be even larger increases in debt. The prospect of large and growing debt poses substantial risks for the nation and presents policymakers with significant challenges.

In this report, CBO presents its projections of federal spending, revenues, deficits, and debt for the next three decades and describes some possible consequences of those budgetary outcomes. This report’s projections are consistent with the 10-year baseline budget and economic projections that CBO published in the spring of 2018. They extend most of the concepts underlying those projections for an additional 20 years, and they reflect the macroeconomic effects of projected fiscal policy over that 30-year period. Altogether, they constitute the agency’s extended baseline projections.

CBO’s 10-year and extended baseline projections are not predictions of budgetary outcomes. Rather, they represent the agency’s best assessment of future spending, revenues, deficits, and debt under the assumption that current laws generally remain unchanged. They also give lawmakers a point of comparison from which to measure the effects of proposed legislation.