The federal debt is expected to grow over the next 30 years to historic levels, eventually reaching 181 percent of the country’s gross domestic product (GDP), the nonpartisan Congressional Budget Office (CBO) forecast in its 2023 Long-Term Budget Outlook.

“The U.S. faces a challenging fiscal outlook in the coming years,” the Outlook stated. “Measured as a percentage of GDP, large and sustained deficits lead to high and rising federal debt that exceeds any previously recorded level.”

The CBO reported that by the end of fiscal year 2023, federal debt held by the public would be 98 percent of GDP. The office expects the debt to surpass its historical high and reach 107 percent of the country’s GDP by 2029.

The Outlook stated that outlays fell to 24.2 percent of GDP as federal spending in response to the pandemic slowed. It predicted that spending would continue to decline through 2026, then increase to 29.1 percent of GDP in 2053. Spending will increase “significantly” in the next 30 years due to costs of the major health care programs and Social Security, driven by the aging of the population and growing health care costs.

Revenues fell to 18.4 percent of GDP in 2023, the CBO reported, and they will continue to drop until 2026, when the scheduled expiration of certain provisions of the 2017 Tax Cuts and Jobs Act (TCJA) will cause tax receipts to increase. If those provisions expire as scheduled—which is not certain, as Republicans wish to make them permanent—revenues will generally rise to 19.1 percent of GDP in 2053.

The recent agreement to suspend the debt ceiling in exchange for spending reductions is expected to save 3 percent, or $1.5 trillion, from $46.7 trillion (or 119 percent of GDP) to $45.2 trillion (or 115 percent of GDP), the CBO reported earlier this month. That is the same amount as the CBO’s projected federal deficit in the current fiscal year, as of May 23.

The CBO also projected that the total debt held by the public at the end of the fiscal year will be $25.8 trillion, according to its budget projections as of May 12, 2023.