In a new insight, Director of Fiscal Policy Jordan Haring walks through the Congressional Budget Office’s (CBO) recently released January 2025 Budget and Economic Outlook.

Key points:

• CBO projects that federal debt held by the public will rise from 98 percent of gross domestic product (GDP) at the end of fiscal year (FY) 2024 to 100 percent of GDP by 2025, reach a new record of 107.2 percent of GDP by 2029, and continue to grow to 119 percent of GDP by 2035.
• Budget deficits will total 5.8 percent of GDP ($21.8 trillion) over the FY 2026 to 2035 budget window and will total 5.8 percent of GDP ($2.5 trillion) in 2035; spending will total 23.9 percent of GDP ($89.3 trillion) and revenue will total 18.1 percent of GDP ($67.5 trillion) over the next decade.
• Since CBO’s last baseline in June, the net effect of legislative, economic, and technical changes decreased projected deficits by $991 billion over the FY 2025 to 2034 period.
• CBO projects that economic growth and inflation will slow through 2026 and remain moderate thereafter.

Read the analysis