The non-partisan Congressional Budget Office (CBO) released its latest 10-year budget and economic outlook on Friday that showed the federal government is on track to break a debt record set nearly 80 years ago.

The CBO outlook shows that as a percentage of gross domestic product (GDP), or compared to the size of the U.S. economy, the federal debt The public is poised to rise from 98% of GDP at the end of FY2024 to 107% of GDP in FY2029.

At that point, the public debt would not only exceed the size of the US economy, but also surpass the current debt record of 106% of GDP set in 1946, when the US began the process of demobilization after the conclusion of World War II. It is expected to continue growing in the future, reaching 118% of GDP by 2035.

“From 2025 to 2035, the debt rises as increased spending on Social Security, Medicare and interest payments outpace income growth,” CBO Director Phillip Swagel told reporters.

FEDERAL DEFICIT CONTINUES TO GROW, AND THE CONGRESS BUDGET OFFICE HAS SOLUTIONS

The US hit the debt ceiling on Thursday, sparking growing fears of a potential default. (FOX Business/Fox News)

The federal government is expected to manage $1.9 trillion budget deficit during fiscal year 2025. The deficit is expected to narrow briefly in the next two years before resuming the increase projected to more than $2 trillion in 2030 and reaching $2.7 trillion in 2034.

The temporary decrease in the size of the deficit is due in part to the expected maturity of parts of 2017 tax cuts at the end of this year under current legislation that results in an increase in tax revenue. Although Congress and the incoming Trump administration may enact new legislation that expands these provisions.

CBO’s analysis is based on current law, so changes in federal tax and spending policies could alter these numbers.

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Much of the growth in the deficit is due to increase in spending on entitlement programs like Social Security and Medicare as the U.S. population continues to age and the rising cost of servicing a larger national debt during an era of high interest rates.

Expenditure in Social Security It is projected to grow from $1.5 trillion in fiscal year 2025 to $2.6 trillion in fiscal year 2035, while Medicare spending is expected to grow from $942 billion to 1, 7 trillion dollars in this period. The cost of paying interest on the national debt rises from a projected $952 billion this fiscal year to more than $1.7 trillion a decade from now.

Swagel also noted that Social Security’s Old Age and Survivors Insurance Trust Fund is projected to run out in 2033, the same year projected in the CBO’s most recent analysis last June.

When that trust fund is depleted, Social Security recipients will, by law, see their benefits automatically cut to match payroll tax revenue, an analysis by the nonpartisan Committee on a Federal Budget responsible (CRFB) would result in a 21% reduction in Social Security benefits.

US NATIONAL DEBT HITS A NEW RECORD: $36 TRILLION

“A fiscally weak country cannot remain a strong country for long,” CRFB President Maya MacGuineas said in a statement. “America has built a dangerous mountain of debt simply because our political leaders are unwilling to do the hard work of governing responsibly and acting as fiscal stewards of the country.

“They choose to borrow at record levels instead of recognizing that part of the budget is having a plan to pay the bills and despite the incredible damage they continue to do to the country as the debt grows,” he added. “As today’s report shows, our debt is at near-record levels only since World War II, we will spend more in interest than any program other than Social Security, and Social Security will become insolvent in less than a decade.”

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Michael Peterson, CEO of the nonpartisan Peter G. Peterson Foundation, said: “By definition, we are on an unsustainable fiscal path. We are currently on track to add $22 trillion to our national debt over the next ten years, including $14 trillion spent on interest costs alone In ten years, our debt will grow to a staggering 118% of our entire economy.

“Today’s report paints a bleak outlook, but the good news is that there are many policy solutions available to address our fiscal challenges,” Peterson added. “As we approach Inauguration Day, our leaders have a new opportunity to secure America’s economic future by putting us on a stronger and more sustainable fiscal path.”