The Congressional Budget Office (CBO) projects that making the 2017 Trump-era tax cuts permanent could cause U.S. debt to reach 214% of gross domestic product (GDP) by 2054. The projection was released in response to an inquiry from Rep. David Schweikert (R-Ariz.), a member of the House Ways and Means Committee.
This estimate is 47 percentage points higher than the CBO’s previous long-term projection, which assumed a 10-year extension of the tax cuts. Under that scenario, debt would reach 166% of GDP. If interest rates rise just one percentage point above current assumptions, debt could rise to 250% of GDP by 2054.
The findings challenge Senate Republicans’ preference for a “current policy baseline” that assumes the tax cuts will be extended and wouldn’t increase the deficit. The CBO says such extensions would add $4.7 trillion to deficits over the next decade.
Treasury Secretary Scott Bessent criticized the CBO’s scoring system, calling it “crazy,” and questioned the fairness of congressional budget rules that treat spending and revenue changes differently.
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