CBO Warns of Worsening Federal Deficits and Debt Over Next Decade

Nonpartisan budget office projects rising spending on Social Security, Medicare, and debt service will drive fiscal outlook downward.

Published on Feb. 11, 2026

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The Congressional Budget Office's 10-year outlook forecasts growing federal deficits and debt, driven largely by increased spending on Social Security, Medicare, and debt service payments. Compared to last year's analysis, the fiscal outlook has deteriorated modestly due to factors like the 'One Big Beautiful Bill Act,' higher tariffs, and stricter immigration policies.

Why it matters

Rising debt and debt service payments can crowd out government spending on critical investments like infrastructure and education, hampering future economic growth. The CBO's projections indicate that inflation will not reach the Federal Reserve's 2% target until 2030, further complicating the fiscal picture.

The details

The CBO's latest 10-year outlook shows the 2026 deficit is projected to be about $100 billion higher than previously estimated, and total deficits from 2026 to 2035 are $1.4 trillion larger. Debt held by the public is expected to rise from 101% of GDP to 120% - exceeding historical highs. While higher tariffs have raised federal revenue by $3 trillion, that has also contributed to higher inflation from 2026 to 2029.

  • The CBO released its latest 10-year budget outlook on February 11, 2026.

The players

Congressional Budget Office (CBO)

A nonpartisan federal agency that provides budget and economic analysis to Congress.

Donald Trump

The President of the United States who deployed a Department of Government Efficiency in an effort to balance the budget, though the cuts achieved were far less than the $2 trillion goal.

Jonathan Burks

Executive vice president of economic and health policy at the Bipartisan Policy Center, who said large deficits are 'unprecedented for a growing, peacetime economy' and encouraged lawmakers to act now before options become 'more painful'.

Michael Peterson

CEO of the Peterson Foundation, who said the CBO's projection is an 'urgent warning' and that stabilizing the debt must be a 'core component' of the 2026 campaign conversation.

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What they’re saying

“Large deficits are unprecedented for a growing, peacetime economy though the good news is there is still time for policymakers to correct course.”

— Jonathan Burks, Executive vice president of economic and health policy at the Bipartisan Policy Center (wbal.com)

“This election year, voters understand the connection between rising debt and their personal economic condition. And the financial markets are watching. Stabilizing our debt is an essential part of improving affordability, and must be a core component of the 2026 campaign conversation.”

— Michael Peterson, CEO of the Peterson Foundation (wbal.com)

What’s next

The CBO's projections indicate that inflation will not reach the Federal Reserve's 2% target until 2030, which could further complicate efforts to address the growing fiscal challenges.

The takeaway

The CBO's latest budget outlook serves as a stark warning about America's costly fiscal path, with rising deficits and debt threatening to crowd out critical investments in infrastructure, education, and other drivers of future economic growth. Policymakers will need to work together to explore options for raising revenue, trimming spending, and slowing the growth of major cost drivers like Social Security and Medicare in order to put the country on a more sustainable fiscal trajectory.