The Congressional Budget Office (CBO) released its February 2026 Budget and Economic Outlook today, updating its January 2025 baseline to account for the One Big Beautiful Bill Act (OBBBA), tariffs, changes in immigration, recent trends in the economy, and other factors.
CBO's latest projections show: With debt approaching record levels, interest costs exploding, trust funds approaching insolvency, and deficits expected to remain more than twice as large as the oft-discussed 3% of GDP target , lawmakers should come together to enact significant deficit reduction. Debt held by the public is currently around 100% of GDP, roughly double the 50-year historical average.
Under CBO's baseline, debt will surpass the 106% of GDP record set after World War II by FY 2030 – just four years from now – and will continue to grow to 120% of GDP by 2036. In dollar terms, debt held by the public is currently almost $31 trillion and will rise to above $36 trillion in 2028, $47 trillion in 2033, and over $56 trillion in 2036. Actual debt could grow even faster than CBO's baseline projections.
For example, we estimate debt would rise to 131% of GDP by 2036, as opposed to 120%, if the Supreme Court rules that many of the recently-imposed tariffs are illegal , lawmakers make permanent the temporary provisions in OBBBA , and enhanced Affordable Care Act health insurance subsidies are revived on a permanent basis.
High and rising debt levels present significant risks and threats to the economy and the nation as a whole. This includes slower economic growth, higher interest rates , increased inflationary pressure, heightened national security risks, reduced fiscal space, growing debt service payments, and greater risk of a fiscal crisis . Other references and insights: Check here
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