JULY | 2023
Notes: Unless this report indicates otherwise, all years referred to are federal fiscal years, which run from October1 to September30 and are designated by
the calendar year in which they end. All dollar amounts are in 2023dollars. CBO’s long-term budget projections, referred to as the extended baseline, typically
follow the agency’s 10-year baseline budget projections and then extend most of the concepts underlying those projections for an additional 20years. This
year, however, the long-term projections are based on the agency’s May2023baseline projections but also reflect the estimated budgetary eects of the Fiscal
Responsibility Act of 2023(Public Law118-5), enacted on June3, 2023.
I
f current laws governing taxes and spending gener-
ally remained unchanged, the federal budget decit
would nearly double in relation to gross domestic
product (GDP) over the next 30years, driving up
federal debt, the Congressional Budget Oce projects.
1
In CBO’s extended baseline projections, debt held by
the public rises from 98percent of GDP in 2023 to
181percent of GDP in 2053—exceeding any previously
recorded level and on track to increase further. ose
projections are not predictions of budgetary outcomes;
rather, they give lawmakers a point of comparison from
which to measure the eects of policy options or pro-
posed legislation.
Economic conditions that diered from those CBO
projects and scal policy that diered from current law
could yield noticeably dierent results. To show how
changes in economic conditions or in current law might
aect budgetary and economic outcomes, CBO analyzed
eight scenarios that dier from those underlying the
agency’s long-term baseline projections—six that vary
economic outcomes, one that varies budgetary outcomes,
and one that limits Social Security benets.
•
If the productivity of labor and capital in the
nonfarm business sector grew 0.5percentage
points per year faster or slower than CBO projects,
federal debt held by the public in 2053 would
be 137percent of GDP or 228percent of GDP,
respectively.
1. Congressional Budget Oce, e 2023 Long-Term Budget
Outlook (June 2023), www.cbo.gov/publication/59014.
•
If the average interest rate on federal debt was above
or below the baseline projection by an amount that
started at 5basis points in 2023 and changed by that
amount in each year thereafter, federal debt held by
the public in 2053 would be 231percent of GDP or
143percent of GDP, respectively. (A basis point is
one-hundredth of a percentage point.)
•
If government borrowing reduced private investment by
twice as much as it does in CBO’s long-term projections
or had no eect on that investment, federal debt held by
the public in 2053 would exceed 250percent of GDP or
would be 145percent of GDP, respectively.
•
If, between 2023 and 2053, discretionary spending and
revenues were at their 30-year historical averages as a
percentage of GDP, then federal debt held by the public
in 2053 would exceed 250percent of GDP. Under that
scenario, discretionary spending would equal 7.1percent
of GDP and revenues would equal 17.2percent of
GDP in every year, 1.4percentage points more and
1.2percentage points less, respectively, than they average
in CBO’s extended baseline projections.
•
If Social Security benets were limited to the amounts
payable from dedicated funding sources after the
combined trust funds are exhausted (that is, their
balances reach zero) in scal year 2033, federal debt held
by the public in 2053 would be 132percent of GDP.
2
2. For additional discussion of a scenario in which the program
continues to pay benets as scheduled under current law,
regardless of whether the program’s two trust funds have
sucient balances to cover those payments, see Congressional
Budget Oce, CBO’s 2023 Long-Term Projections for Social
Security (June2023), www.cbo.gov/publication/59184.
The Long-Term Budget
Outlook Under Alternative
Scenarios for the Economy
and the Budget
