CBO Projects U.S. Debt to Hit 120% of GDP as Trump Tax, Tariff and Deportation Policies Widen Deficits
The Congressional Budget Office projects federal deficits and debt will worsen over the next decade, pushing debt to roughly 120% of GDP as rising Social Security, Medicare and interest costs are made larger once the administration’s One Big Beautiful Bill, higher tariffs and mass‑deportation policies are factored in — raising the 2026 deficit by about $100 billion and adding roughly $1.4 trillion to deficits over 2026–2035. The CBO also finds tariffs would raise about $3 trillion in revenue but boost inflation between 2026–29 (with inflation expected to stay above the Fed’s 2% target until 2030), prompting policy groups to urge Congress to combine revenue increases and spending restraint as voters and markets watch the debt trajectory.
đź“Ś Key Facts
- The CBO confirms that long-term U.S. deficits and debt will worsen, driven mainly by rising Social Security, Medicare and interest costs.
- Relative to last year’s projections, the CBO now estimates the 2026 deficit is about $100 billion higher and cumulative deficits for 2026–2035 are roughly $1.4 trillion larger once President Trump’s One Big Beautiful Bill Act, higher tariffs and a mass-deportation policy are factored in.
- The CBO projects higher tariffs would raise about $3 trillion in revenue but would cause higher inflation between 2026 and 2029.
- The CBO expects inflation to remain above the Federal Reserve’s 2% target through 2030.
- The Bipartisan Policy Center and the Peterson Foundation urged Congress to pursue a mix of revenue increases and spending restraint, noting that voters and markets are watching the debt trajectory.
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- Confirms CBO’s topline conclusion that long‑term deficits and debt will worsen, driven mainly by rising Social Security, Medicare and interest costs.
- Spells out that higher tariffs are projected to raise about $3 trillion in revenue but will cause higher inflation between 2026 and 2029.
- Underscores that, relative to last year’s projections, the 2026 deficit is now about $100 billion higher and total 2026–2035 deficits are $1.4 trillion larger once Trump’s One Big Beautiful Bill Act, tariffs and mass‑deportation policy are factored in.
- Highlights that the CBO now expects inflation to stay above the Federal Reserve’s 2% target until 2030.
- Adds reactions from the Bipartisan Policy Center and Peterson Foundation explicitly urging Congress to take up a mix of revenue increases and spending restraint, and noting that voters and markets are watching the debt trajectory.