Policy Backgrounders

June 2024 CBO Budget and Economic Outlook

June 20, 2024

Trusted Insights for What’s Ahead^®

The Congressional Budget Office (CBO) updated its ten-year budget and economic outlook for 2024 to 2034 this week, projecting record levels of deficits and national debt over the next decade. On CBO’s estimates, which are based on current law, cumulative deficits over the period will total $24 trillion, and the national debt will reach 122 percent of GDP in 2034.

• Mandatory spending on Social Security and Medicare is the primary contributor to increasing deficits, driven by an aging population and rising Federal health care costs per beneficiary.
• In an environment of elevated interest rates, net interest outlays to service the national debt will be the highest since 1940, rising to $1.7 trillion (4.1 percent of GDP) in 2034.
• CBO projects slowing US economic growth in 2024 and 2025 because of lower consumer spending and anticipates inflation will stabilize over the next several years, leading to interest rate cuts from the Federal Reserve in 2025.