The U.S. government is on track to pay creditors as much as retirees in three decades amid growing public debt and rising interest rates, the Congressional Budget Office said Tuesday.
The CBO projects net interest payments will exceed discretionary spending by 2045 and by 2048 match Social-Security outlays of 6.3 percent of gross domestic product. Social Security is currently the country’s largest federal program, the office, a nonpartisan arm of Congress, said in its annual Long-Term Budget Outlook report.
Higher interest payments will come as public debt surges from an estimated 78 percent of GDP in 2018 to 152 percent by 2048, a record for the country “by far,” the CBO said. The office said debt will go even higher if lawmakers make tax cuts for individuals permanent, as some Republicans have proposed.
“The prospect of large and growing debt poses substantial risks for the nation and presents policy makers with significant challenges,” according to the CBO.
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