Chairman Arrington on CBO Baseline: 'We must Reverse the Curse!'
WASHINGTON, D.C. – Today, the Congressional Budget Office (CBO) published its updated baseline, the annual Budget and Economic Outlook. House Budget Committee Chairman Jodey Arrington (R-Texas) released the following statement:
"While I agree with CBO’s projection that mounting mandatory spending driven by demographics continues at an unsustainable rate, I take great exception with CBO’s confoundingly low assumptions for economic growth.
"As a result of Republicans’ pro-growth policies, interest rates are coming down, business investment is up, and GDP growth is on pace to be 3% or better. Surprisingly, the CBO only estimates an average growth rate of 1.8%.
"They claim tariffs, for example, are a major factor in their paltry growth predictions. This flies in the face of the current facts. As a result of President Trump’s historic trade deals, the United States has experienced record exports, the lowest trade deficit since 2009, and quadrupled tariff revenue, along with $9.6 trillion in additional direct foreign investment.
"The American people gave President Trump an historic mandate and unified Republican leadership to reverse course on the four years of failed Democrat policies and their disastrous consequences. We enacted permanent tax relief, unleashed domestic energy production, and significantly reduced federal spending. As a result, interest rates and inflation are down, real wages and take-home pay are up, and we’ve witnessed an economic and growth surge of 4.4% in the last quarter. In fact, with strong economic growth, constrained spending, and record trade-related revenue, the deficit is down from 6.3% to 5.8%.
"While Republicans have made meaningful strides to restore our nation’s fiscal health, both parties must work together to address the structural imbalance in our federal budget caused by soaring entitlements, which is why the House Budget Committee will continue to pursue a bipartisan debt commission. While this commission is not a panacea, it can offer a productive, depoliticized forum for educating the public and identifying solutions regarding our deficit spending and long-term unfunded liabilities.
"We must Reverse the Curse!"
BACKGROUND
Today, the Congressional Budget Office (CBO) released its updated budget projections for fiscal years (FY) 2026-2036. CBO’s report helps Congress understand the fiscal and economic challenges facing the country. According to the report:
- Gross Federal Debt totals $63.7 trillion (136.4 percent of GDP) in 2036, up from $38.6 trillion (123.1 percent of GDP) now. Debt is currently at the highest level in American history and keeps rising.
- 10-Year Deficit totals $24.4 trillion, greater than all deficit spending by the federal government from 1789 to 2023. The deficit increases by 68 percent over the budget window, growing from $1.9 trillion this year to $3.1 trillion (6.7 percent of GDP) in 2036.
- Mandatory Spending totals $57.9 trillion over ten years, and grows from $4.5 trillion (14.2 percent of GDP) in 2026 to $7.0 trillion (15.0 percent of GDP) in 2036.
- Net Interest Spending totals $16.2 trillion over ten years. It grows from $1.0 trillion (3.3 percent of GDP) in 2026 to $2.1 trillion (4.6 percent of GDP) in 2036. In 2026, interest spending will be the third largest item in the federal budget behind only Social Security and Medicare. Interest spending exceeds defense spending every year of the budget outlook, and is almost double defense spending by 2036. In every year of the budget outlook interest spending, as a percent of GDP, is at the highest recorded level in American history. Interest costs are projected to increase from 9 percent of federal revenue in 2021 to 19 percent of federal revenue in 2026 to 26 percent of federal revenue in 2036. Over the next ten years, for every dollar the federal government borrows, 66 cents will go to pay interest on the national debt.
