US national debt to surge to record levels without reform, raising prospect of debt crisis
How do the expiring Trump tax cuts affect the budget?
The expiring Trump tax cuts, enacted in 2017, could increase taxes for over 60% of filers if not extended by Congress. President Biden plans to extend tax cuts for households making less than $400,000, while allowing taxes to rise for higher earners2. Fully extending the tax cuts could add $4.6 trillion to the deficit over a decade. The outcome depends on negotiations between Congress and the White House.
What are the projected US debt levels by 2034?
The Congressional Budget Office projects that by 2034, the U.S. federal debt held by the public will grow to 122% of the gross domestic product (GDP), reaching a record-breaking level. This is an increase from 99% of GDP in 2024.
How does the 2027 debt-to-GDP ratio compare to historical levels?
The 2027 debt-to-GDP ratio, projected at 106%, exceeds historical levels, surpassing the previous record set in 1946 (post-World War II demobilization). This increase results from widening budget deficits and rising public debt, raising concerns about a potential debt crisis.