America’s debt is growing faster than previously expected, largely due to actions taken by the Biden administration and recent legislation, according to the Congressional Budget Office (CBO).
The United States’ projected deficit is $1.9 trillion for the 2024 fiscal year, $400 billion higher than it was projected to be in February, the CBO announced Tuesday. CBO analysts increased their estimate due in large part to the foreign aid package signed by President Joe Biden in April and his administration’s efforts to reduce student loan balances.
If the United States continues on its current course, the CBO projects its debt will reach $50.7 trillion by the end of 2034, up from 26.2 trillion as of the end of 2023. Debt will equal about 122% of America’s GDP in 2034, according to the CBO’s projections.
The CBO notes that the $95 billion in aid to Ukraine, Israel and countries in the Indo-Pacific region had to be incorporated in their projections after Biden signed the legislation, adding to the deficit.
To account for Biden’s April proposal to forgive student loan debt, the CBO incorporated $66 billion worth of costs into its projection, half of the estimated $132 billion cost of the program. The CBO only used half the cost of the program to control for the possibility of the rule providing debt forgiveness not being finalized. If the Biden administration succeeds in finalizing the rule, the CBO’s projection will increase by another $66 billion.
“These are mind boggling and civilization ending numbers,” Republican Georgia Rep. Mike Collins said on X, reacting to the CBO’s new projections. “Congress must get serious about addressing annual deficits and the national debt. This cannot continue for much longer.”
Other factors the CBO identified as contributing to the deficit included increased Medicaid costs and higher spending on FDIC insurance following turmoil in the banking industry during 2023 and 2024.
The amount of interest the federal government will need to pay on its debt is also projected to increase, with net interest outlays estimated to be $892 billion in 2024, a figure that will rise to $1.7 trillion in 2034, according to the CBO. In addition to having to pay interest on its debts, the United States also faces an estimated $93.1 trillion in unfunded liabilities for programs like Social Security.
The White House in March released a statement claiming that Biden’s budget will decrease the deficit by $3 trillion over the next decade.
“I’ve cut the deficit by over one trillion dollars,” the president said on X that same month. “Donald Trump added more to the national debt than any presidential term in American history,” he continued.
A USA Today fact check found this claim to be false, pointing out that the national debt grew more under former President Barack Obama in terms of raw dollars than it did under Trump.
Featured image credit: (Official White House Photo by Adam Schultz)
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