Federal Deficits, Debt Projected to Worsen Over Next Decade

CBO report warns of rising debt and deficit levels, exceeding historical highs

Published on Feb. 12, 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. Compared to last year's analysis, the fiscal outlook has deteriorated modestly, with the projected 2026 deficit about $100 billion higher and total deficits from 2026 to 2035 $1.4 trillion larger. Debt held by the public is projected to rise from 101% of GDP to 120%, exceeding historical highs.

Why it matters

Rising debt and debt service is important because repaying investors for borrowed money crowds out government spending on basic needs such as roads, infrastructure and education, which enable investments in future economic growth. The CBO's projections indicate that inflation doesn't hit the Federal Reserve's 2% target rate until 2030, further complicating the fiscal outlook.

The details

Major developments over the last year factored into the CBO's latest report include Republicans' tax and spending measure known as the 'One Big Beautiful Bill Act,' higher tariffs, and the Trump administration's crackdown on immigration. While higher tariffs partially offset some of the deficit increases by raising federal revenue by $3 trillion, that also comes with higher inflation from 2026 to 2029.

  • The CBO's 10-year outlook was released on Wednesday, February 12, 2026.
  • The projected 2026 deficit is about $100 billion higher than the previous year's analysis.
  • Total deficits from 2026 to 2035 are $1.4 trillion larger than the previous projection.
  • Debt held by the public is projected to rise from 101% of GDP to 120% by 2026.

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 (Bipartisan Policy Center)

“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 (Peterson Foundation)

What’s next

Congress and the administration should work together to explore options for raising revenue, trimming spending, and slowing the growth of the major cost drivers before the available menu of choices becomes much more painful.

The takeaway

The CBO's latest budget projection is an urgent warning about America's costly fiscal path, with rising deficits and debt levels exceeding historical highs. Policymakers must act now to address these challenges and put the country on a more sustainable fiscal trajectory.