Federal Deficits and Debt Projected to Worsen Over Next Decade

Budget office warns of rising spending on Social Security, Medicare, and debt service payments

Feb. 21, 2026 at 9:08pm

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The nonpartisan Congressional Budget Office has released a 10-year outlook projecting worsening long-term federal deficits and rising debt, driven largely by increased spending on Social Security, Medicare, and debt service payments.

Why it matters

The CBO's projections highlight the growing fiscal challenges facing the federal government, with rising entitlement and interest costs straining the budget and contributing to a widening deficit. This could put pressure on policymakers to address the long-term fiscal outlook through spending reforms, revenue increases, or a combination of both.

The details

According to the CBO report, federal deficits are expected to grow over the next decade, reaching over $2 trillion annually by 2030. This is driven by a projected 5.5% average annual increase in mandatory spending, including a 6.2% rise in Social Security outlays and a 5.9% increase in Medicare expenditures. Additionally, interest payments on the national debt are forecast to nearly double over the 10-year period.

  • The CBO released its 10-year budget outlook on February 21, 2026.

The players

Congressional Budget Office

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

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What’s next

Policymakers will likely need to address the CBO's projections through a combination of spending reforms, revenue increases, or a combination of both in order to put the federal budget on a more sustainable long-term path.

The takeaway

The CBO's bleak fiscal outlook underscores the growing challenge of managing rising entitlement and interest costs, which could force difficult decisions about the size and role of the federal government in the years ahead.