U.S. Fiscal Situation: Still Sliding

By Ryan Boyle

Routine physical checkups are an important component of healthcare. A doctor can identify potential problems and coach the patient toward making healthier choices.

The U.S. has just had a visit with a fiscal specialist, and the diagnosis is sobering. The Congressional Budget Office (CBO) released its first ten-year budget outlook incorporating last year's "One Big Beautiful" reconciliation bill. The report sees annual deficits remaining near $2 trillion, or 6% of gross domestic product (GDP), in the years ahead. The national debt is on track to rise to 120% of GDP in 2036, from about 100% now.

The CBO makes as few assumptions as possible in their outlook. Future income tax rates are held steady; tariff revenues are assumed to peak in 2026, then decline gradually as imports are substituted. Paths for GDP growth, inflation and employment are all consistent with a stable economy.