The national debt will exceed the size of the entire U.S. economy by 2021 — and balloon to nearly 200 percent of GDP within 25 years — without dramatic cuts to federal health and retirement programs or steep tax increases, congressional budget analysts said Wednesday.
The dire outlook from the nonpartisan Congressional Budget Office comes as the White House and congressional leaders are locked in negotiations aimed at cutting spending and stabilizing future borrowing. The CBO report highlights the enormity of that task and the immense difficulty of paying off the debt, given an aging population and soaring health-care costs.
Over the long term, the CBO said, a projected explosion in government spending outside interest on the debt is “attributable entirely” to the ballooning cost of “Social Security, Medicare, Medicaid, and (to a lesser extent) insurance subsidies” intended to help finance coverage for the uninsured under President Obama’s new health-care law.
“The health care programs are the main drivers of that growth,” the CBO said, responsible for 80 percent of the projected rise in spending on those programs over the next 25 years.