Federal Deficits and Debt Projected to Worsen Over Next Decade

Congressional Budget Office forecasts rising spending, debt service payments, and inflation staying above 2% target until 2030

Published on Feb. 11, 2026

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The nonpartisan Congressional Budget Office's 10-year outlook projects worsening long-term federal deficits and rising debt, driven largely by increased spending on Social Security, Medicare, and debt service payments. The CBO's latest report indicates that inflation is not expected to hit the Federal Reserve's 2% target rate until 2030, and that higher tariffs will partially offset some spending increases but also contribute to higher inflation from 2026 to 2029.

Why it matters

Rising federal debt and debt service payments can crowd out government spending on critical investments in infrastructure, education, and other areas that enable future economic growth. The CBO's projections suggest policymakers will face difficult choices in the coming years to address the country's fiscal challenges.

The details

According to the CBO's analysis, the projected 2026 deficit is about $100 billion higher than previously forecast, and total deficits from 2026 to 2035 are $1.4 trillion larger. Debt held by the public is projected to rise from 101% of GDP to 120% - exceeding historical highs. The CBO's report factors in recent policy changes, including the 'One Big Beautiful Bill Act', higher tariffs, and the Trump administration's crackdown on immigration.

  • The CBO's 10-year outlook was released on February 11, 2026.
  • The CBO projects inflation will not hit the Federal Reserve's 2% target rate until 2030.

The players

Congressional Budget Office

The nonpartisan Congressional agency that provides budget and economic analysis to Congress.

Jonathan Burks

Executive vice president of economic and health policy at the Bipartisan Policy Center.

Michael Peterson

CEO of the Peterson Foundation, a nonpartisan organization focused on addressing America's fiscal challenges.

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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 (PBS NewsHour)

“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 (PBS NewsHour)

What’s next

Lawmakers 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 address the country's worsening fiscal outlook.

The takeaway

The CBO's projections highlight the urgent need for policymakers to take action to stabilize the federal government's finances and debt levels, which if left unchecked, could crowd out critical investments in the nation's future economic growth and prosperity.