U.S. Debt on Track to Hit a Record 107% of GDP by 2031, CBO Says

WASHINGTON—Federal deficits are projected to soar over the next decade, but not as much as officials forecast last summer, thanks to an improving economic outlook that is expected to bolster federal revenues, the Congressional Budget Office said Thursday.

Federal debt, which reached 100% of gross domestic product in the last fiscal year, is expected to rise to a record 107% of economic output by 2031.

The agency expects cumulative deficits over the next 10 years will total $12.6 trillion, 3% less than projected in September, the last time the agency released its estimates. The decline stems from stronger-than-expected economic activity, higher inflation and higher interest rates, which will boost federal tax revenue more than spending, the nonpartisan agency said.

Republicans in Congress who object to President Biden’s $1.9 trillion stimulus packagehave pointed to growing budget deficits and debt as a reason to keep spending in check. They also argue the economy is already poised for stronger growth this year. Democrats, who control the House and Senate with narrow majorities, are on track to approve the bill.