Debt Held by U.S. Public Set to Soar

The debt held by the U.S. public is set to reach a record high in the coming years as the U.S. budget deficit—the difference between government spending and revenues—soars, The Hill reports.

What’s going on: “The Congressional Budget Office … projected the debt held by the public will rise significantly over the next decade, climbing from 99% of GDP in 2024 to 116% in 2034. The jump would mark a high-water mark, the CBO said, while noting that, absent policy changes, the debt is likely to continue the upward trajectory after 2034.”

The CBO projected that the federal budget deficit would increase by nearly two-thirds in the next decade.
Beginning in 2025, net interest costs will be greater in relation to GDP “than at any point since at least 1940, the first year for which the Office of Management and Budget reports such data,” according to the CBO.

Lower than previously estimated: The forecasted deficit for 2024, however, is approximately $100 billion less than the office estimated last spring.

This is “partly due to lower discretionary spending stemming from a budget caps deal negotiated between former Speaker Kevin McCarthy (R-Calif.) and President Biden last year known as the Fiscal Responsibility Act.”