Rising Federal Debt Raises Concerns for Economic Stability

Thu Feb 12 2026 00:50:47 GMT+0200 (Eastern European Standard Time)

New projections by the Congressional Budget Office highlight escalating federal deficits over the next decade, prompting calls for action from policymakers to address the growing financial crisis.

The Congressional Budget Office (CBO) has released a grim outlook for U.S. federal finances, forecasting increasing deficits largely due to heightened spending on essential programs like Social Security and Medicare. The projected debt held by the public is set to rise significantly, potentially exceeding historical highs. Experts urge lawmakers to take immediate action to stabilize the economy and manage the troubling fiscal trajectory.

In a stark warning about the future of the U.S. economy, the nonpartisan Congressional Budget Office (CBO) released a 10-year outlook indicating that federal deficits are set to worsen considerably. This projection, which highlights a significant uptick in national debt driven by increased spending on crucial programs such as Social Security and Medicare, raises alarms over the sustainability of fiscal policy in peacetime.

Compared to last year's analysis, the CBO's fiscal forecast has deteriorated, projecting a 2026 deficit that is approximately $100 billion higher. Over the next decade, total deficits are expected to rise by $1.4 trillion, with public debt projected to climb from 101% of Gross Domestic Product (GDP) to 120%, surpassing historical highs.

The report also notes that while recent tax and spending measures implemented by the government, notably the One Big Beautiful Bill Act, have contributed to increasing revenues via higher tariffs, they won’t fully alleviate the impending fiscal challenges. Moreover, these tariffs may contribute to rising inflation, further complicating the economic landscape.

Experts in economic policy stress that elevated debt levels crowd out government spending on essential infrastructure, education, and other critical services necessary for sustainable economic growth. Jonathan Burks of the Bipartisan Policy Center emphasizes the urgency for policymakers to explore strategies to raise revenue, trim spending, and manage major cost drivers. The good news is there is still time for policymakers to correct course, he said.

As Congress and the administration navigate these fiscal waters, the current trajectory suggests that decisive action is required before options become increasingly painful and limited. Michael Peterson of the Peterson Foundation warns that stabilizing debt levels is crucial for economic affordability and should be a pivotal topic in upcoming electoral discussions.

As voters become more aware of the connection between national debt and personal economic conditions, the pressure mounts on leaders to create a sustainable fiscal strategy that can stabilize the U.S. economy in the long run.