Rising Debt: Our Policy Options

As discussed in yesterday’s blog post and in CBO’s The 2014 Long-Term Budget Outlook, if current laws remain generally unchanged, debt held by the public is projected to exceed its current percentage of GDP—74 percent—after 2020 and to continue rising on a path that would ultimately be unsustainable. To put the federal budget on a sustainable path for the long term, lawmakers would have to make significant changes to tax and spending policies: reducing spending for large benefit programs below the projected levels, letting revenues rise more than they would under current law, or adopting some combination of those approaches. One way to think about the magnitude of that challenge is to assess the changes in spending or revenues that would be needed to achieve a chosen goal for federal debt.