Summary
The Federal Budget
The deficit totals $1.6 trillion in fiscal year 2024, grows to $1.8 trillion in 2025, and then returns to $1.6 trillion by 2027. Thereafter, deficits steadily mount, reaching $2.6 trillion in 2034. Measured in relation to gross domestic product (GDP), the deficit amounts to 5.6 percent in 2024, grows to 6.1 percent in 2025, and then shrinks to 5.2 percent in 2027 and 2028. After 2028, deficits climb as a percentage of GDP, returning to 6.1 percent in 2034. Since the Great Depression, deficits have exceeded that level only during and shortly after World War II, the 2007–2009 financial crisis, and the coronavirus pandemic.
Interactive
Debt held by the public increases from 99 percent of GDP at the end of 2024 to 116 percent of GDP—the highest level ever recorded—by the end of 2034. After 2034, debt would continue to grow if current laws generally remained unchanged.
Outlays in 2024 amount to 23.1 percent of GDP and stay close to that level through 2028. After 2028, growth in spending on programs for elderly people and rising net interest costs drive up outlays, which reach 24.1 percent of GDP by 2034.
Revenues amount to 17.5 percent of GDP in 2024, decline to 17.1 percent in 2025, and then climb to 17.9 percent of GDP by 2027 after certain provisions of the 2017 tax act expire. Revenues remain near that level through 2034.
Changes in CBO’s Budget Projections Since May 2023
The deficit for 2024 is $0.1 trillion smaller than CBO projected in May 2023, and the cumulative deficit for the 2024–2033 period is $1.4 trillion (or 7 percent) smaller.
The biggest factor contributing to smaller projected deficits is a reduction in discretionary spending stemming from the Fiscal Responsibility Act and the Further Continuing Appropriations and Other Extensions Act, 2024.
The U.S. Economy
Economic growth slows in 2024 as unemployment increases, partly as a result of tight monetary policy. Real (inflation-adjusted) GDP growth accelerates in 2025 after the Federal Reserve responds to weaker economic conditions in 2024 by lowering interest rates.
Interactive
Interest rates rose in 2023 as the federal funds rate increased to its highest level since 2001. In CBO’s projections, that rate begins to decline in the second quarter of calendar year 2024. Interest rates on 10-year Treasury notes rise in 2024 and then fall through 2026.
Inflation (as measured by the price index for personal consumption expenditures) slowed markedly in 2023. In CBO’s projections, it slows further in 2024—to a rate roughly in line with the Federal Reserve’s long-run goal of 2 percent—and then ticks up in 2025, before declining slightly.
Changes in CBO’s Economic Projections Since February 2023
Growth of real GDP is weaker through 2026, similar in 2027, and slightly stronger afterward.
Interest rates are generally higher. From 2024 to 2027, those higher rates mostly reflect the effects of stronger-than-expected economic growth in 2023. In later years, higher rates are driven by more capital income and less private saving.
The labor force is larger because net immigration, which began increasing in 2022, remains elevated through 2026.
CBO’s baseline budget and economic projections reflect the assumption that current laws governing taxes and spending will generally remain unchanged. Deficits and outlays have been adjusted to exclude the effects of shifts that occur in the timing of certain payments when the fiscal year begins on a weekend. Without those adjustments, the deficit projected for 2024 is $1.5 trillion (or 5.3 percent of GDP).
Data and Supplemental Information
Data Underlying Figures
Budget Data
10-Year Budget Projections
Long-Term Budget Projections
Historical Budget Data
10-Year Trust Fund Projections
Revenue Projections, by Category
Spending Projections, by Budget Account
Tax Parameters and Effective Marginal Tax Rates
Economic Data
Economic Projections
Historical Data and Economic Projections
Baseline Projections for Social Security and Pensions
DoD Medicare-Eligible Retiree Health Care Fund
Social Security Disability Insurance
Social Security Old-Age and Survivors Insurance
Social Security Trust Funds
Baseline Projections for Other Income Security
Child Nutrition Programs
Child Support Enforcement and Collections
Foster Care and Adoption Assistance
Supplemental Nutrition Assistance Program
Supplemental Security Income
Temporary Assistance for Needy Families
Unemployment Compensation
Baseline Projections for Other Programs
Airport and Airway Trust Fund
Highway Trust Fund Accounts
Post-9/11 GI Bill Benefits
USDA Mandatory Farm Programs
Veterans Disability Compensation and Pension Programs
Related Publications
An Update to the Budget and Economic Outlook: 2024 to 2034
Budgetary Outcomes Under Alternative Assumptions About Spending and Revenues
The Long-Term Budget Outlook: 2024 to 2054
How Changes in Revenues and Outlays Would Affect Debt-Service Costs, Deficits, and Debt
Testimony on The Budget and Economic Outlook: 2024 to 2034
Director’s Statement on the Budget and Economic Outlook for 2024 to 2034
The Budget and Economic Outlook for 2024 to 2034: Press Briefing Slides
The Economic Outlook for 2024 to 2034 in 19 Slides
The Demographic Outlook: 2024 to 2054
Implementing the Statutory Limits on Discretionary Funding for Fiscal Year 2024
An Update to the Economic Outlook: 2023 to 2025
The 2023 Long-Term Budget Outlook
An Update to the Budget Outlook: 2023 to 2033
CBO Explains How It Develops the Budget Baseline
The Budget and Economic Outlook: 2023 to 2033
How CBO Produces Its 10-Year Economic Forecast: Working Paper 2018-02
Glossary