CBO Reveals Alarming Federal Deficit Projections

Thu Feb 12 2026 01:12:24 GMT+0200 (Eastern European Standard Time)

The latest 10-year outlook from the Congressional Budget Office indicates escalating long-term federal deficits and increasing national debt, primarily driven by rising expenditures on social programs and debt servicing. Key adjustments in policies have led to a notable deterioration in fiscal status.

According to the Congressional Budget Office (CBO), deficits are expected to increase substantially over the next decade. Key aspects include a projected $100 billion increase in the deficit for 2026, and total deficits from 2026 to 2035 rising to $1.4 trillion more than previously estimated. Factors contributing to this include increased spending on Social Security and Medicare, in addition to policy changes made in the last year. The report indicates that a more significant rise in federal debt could hinder investment in vital sectors like infrastructure and education.

WASHINGTON (FluxDaily) — The nonpartisan Congressional Budget Office's (CBO) annual 10-year outlook has unveiled troubling projections of rampant federal deficits and escalating public debt levels. The report highlights alarming trends largely attributed to increased governmental spending, particularly in programs like Social Security and Medicare, and rising debt service costs.

When compared to last year's analysis, the CBO's outlook indicates a slight but significant decline in fiscal performance. This deterioration is largely influenced by major policy shifts across the past year, including Republican tax adjustments, heightened tariffs, and stringent immigration policies.

The CBO's projections reveal that the deficit for 2026 has ballooned by approximately $100 billion, while total deficits from 2026 to 2035 are now forecasted to be $1.4 trillion higher than previously expected. Public debt is on track to rise from 101% of GDP to 120%, surpassing historical peaks.

Interestingly, while the CBO notes that the rise in tariffs could generate up to $3 trillion in federal revenue, it warns that this strategy may lead to increased inflation rates between 2026 and 2029.

The issue of rising debt is particularly stark as it starts to limit government capacity to invest in critical infrastructure, education, and other essential services that propel economic growth. According to Jonathan Burks, executive vice president of economic policy at the Bipartisan Policy Center, 'large deficits are unprecedented for a growing, peacetime economy.' Burks emphasizes the urgency for policymakers to collaborate on solutions to mitigate these projections before the prospects for reforms become significantly constrained.

Michael Peterson, CEO of the Peterson Foundation, emphasized the "urgent warning" of these projections, advocating for a concerted focus on managing debt as part of the 2026 campaign conversation. 'Voters recognize the connection between rising debt and their individual economic well-being, which financial markets are closely watching,' he stated.

Overall, the CBO's report paints a grim picture of the nation’s fiscal future unless immediate action is taken to address these growing challenges.