CED Issues Statement on January 2025 Congressional Budget Office Outlook

Today, David K. Young, President of the Committee for Economic Development (CED), the public policy center of The Conference Board, released the following statement on the new projections from the Congressional Budget Office (CBO):

The CBO’s Budget and Economic Outlook for 2025 to 2035 is another pressing call to action on our nation’s unsustainable fiscal trajectory. CBO projects the deficit in 2025 to be $1.9 trillion, growing to $2.7 trillion by 2035. These projected deficits representing approximately 6% of GDP are significantly more than the average of 3.8% of GDP over the past 50 years and come at a time of low unemployment, when deficits tend to be lower. Rising annual deficits drive growth in the national debt held by the public, which CBO projects to be 100% of GDP in 2025 and to increase to 118% of GDP by 2035, higher than at any point in US history.

Over the next decade, mandatory spending on Social Security and Medicare and paying interest on the debt will continue to drive these historically high debts and deficits. Net interest outlays continue to be particularly concerning, increasing from $952 billion in 2025—higher than defense spending this year—to $1.8 trillion in 2035, equivalent to 4.1% of GDP and more than projected Medicare outlays that year.

The recent CBO projections highlight both the fiscal challenges we face and the responsibility to develop solutions. In particular, we reiterate our call for a bipartisan Congressional commission on fiscal responsibility to consider comprehensive and sustainable solutions to address deficits and debt, save Social Security, and modernize Medicare. Crucially, CBO’s projections by law must assume current law regarding taxation and spending, including the scheduled expiration of key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) at the end of this year, yet Congress seems poised to extend some of the provisions of the law, increasing the debt absent offsets. Showing the magnitude of Congress’ task in finding offsets, CBO estimates the cost of permanently extending the expiring provisions of the TCJA will increase the primary deficit by $4 trillion and net interest outlays by $600 billion between 2025 and 2034.

As the new Congress and Administration consider their fiscal priorities, policymakers must address with urgency the long-term fiscal trajectory of the Federal budget and use this opportunity to set it on a better path—one that will ensure fiscal stability and promote economic growth.

About The Conference Board

The Conference Board is the member-driven think tank that delivers Trusted Insights for What's Ahead^®. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501(c)(3) tax-exempt status in the United States. ConferenceBoard.org

The Committee for Economic Development (CED) is the public policy center of The Conference Board. The nonprofit, nonpartisan, business-led organization delivers well-researched analysis and reasoned solutions in the nation’s interest. CED Trustees are chief executive officers and key executives of leading US companies who bring their unique experience to address today’s pressing policy issues. Collectively, they represent 30+ industries and over 4 million employees. ConferenceBoard.org/us/Committee-Economic-Development