A new Government Accountability Office report says publicly held debt is already roughly equal to the size of the U.S. economy and could rise sharply without action from Congress and the White House.
By yourNEWS Media Newsroom
The federal government is on an increasingly unstable fiscal path, with publicly held debt projected to climb far faster than the economy over the next decade unless policymakers make major changes to taxes, spending or both, according to a new Government Accountability Office report.
In its annual fiscal health report to Congress, the GAO said publicly held debt reached $31.3 trillion as of April 2026, placing it “roughly equal to the size of the country’s economy.”
Gao by yourNEWS Media
The watchdog projected that debt held by the public will rise to 123% of gross domestic product by 2036, growing more than twice as fast as the economy during the next 10 years. Under current tax and spending policies, the debt burden is expected to keep rising for decades.
“The federal government’s long-term fiscal outlook presents risks and challenges that must be confronted,” the report stated.
The GAO said publicly held debt is expected to exceed its previous record of 106% of GDP by 2029 before continuing upward. Over the next three decades, the agency projected the debt could reach 251% of GDP if current policies remain unchanged.
“Over the long term, it is unsustainable for debt to grow faster than the economy grows,” the report said.
The agency attributed the worsening outlook to a long-running gap between federal spending and revenue. For most of the past two decades, the government has spent more than it collected, requiring additional borrowing to cover annual deficits.
The GAO said spending pressures will intensify as the population ages and healthcare costs continue rising. Social Security, Medicare and other federal health programs are expected to account for much of the increase in future spending, while federal revenue is not projected to keep pace.
In fiscal year 2025, the federal government ran a primary deficit of $805 billion, excluding interest costs. Under current policies, those primary deficits are projected to grow larger over time.
Interest on the national debt is also consuming a larger share of federal resources. The GAO said the government spent more than $970 billion on net interest payments in fiscal year 2025, making interest one of the largest categories of federal spending.
The watchdog said the government is now spending more on interest than on national defense and nearly as much as it spends on Medicare. Interest costs are projected to continue rising and could approach 10% of GDP by 2056.
“As of April 2026, publicly held debt was $31.3 trillion, roughly equal to the size of the country’s economy,” the watchdog reported. “Publicly held debt is projected to grow more than twice as fast as the economy over the next 10 years, reaching 123% of the size of the economy in 2036.”
The GAO also warned that interest costs could eventually overtake the government’s largest benefit program.
“We project that by 2044 the government will spend more on net interest than on Social Security,” the report stated.
The consequences of rising debt would extend beyond the federal budget, according to the GAO. The agency warned that continued debt growth could push up borrowing costs for households and businesses, slow economic growth and limit the government’s ability to respond to emergencies.
The report said the country’s fiscal path poses “serious economic, national security, and societal challenges,” including “lower wage growth, higher prices, and higher interest rates for household and business loans.”
To address those risks, the GAO urged Congress and the White House to create a long-term fiscal strategy. The agency recommended setting fiscal targets and budget rules designed to place the debt on a more sustainable course.
The report said policymakers could consider a range of options, including raising federal revenues, reducing spending, reforming major entitlement programs, reviewing tax expenditures and addressing financing gaps in Social Security and Medicare.
The GAO estimated that keeping debt near 100% of GDP by 2056 would require substantial changes. The government would need to collect 26% more revenue each year, cut federal program spending by 21% annually or adopt a combination of revenue increases and spending reductions.
The watchdog also said waiting to act would increase the size and difficulty of the necessary changes.
“The longer actions are delayed, the more dramatic they will need to be,” GAO warned.
The agency also renewed its recommendation that Congress replace the current debt-limit process, saying the existing system “does not serve as a control on fiscal policy.”
The report places renewed pressure on Congress and the White House to confront long-term deficits as debt, interest costs and major federal benefit programs consume a growing share of national resources.
Original article
Comments