CBO says Trump's new borrowing adds $1.4 trillion to federal debt by 2035

The Congressional Budget Office released its February 2026 Budget and Economic Outlook on February 7, 2026. The report projected that the federal deficit would reach $1.9 trillion in fiscal year 2026 and that federal debt held by the public would rise to 117 percent of GDP by 2035, up from roughly 100 percent today.

The CBO projections did not yet include the One Big Beautiful Bill Act, which Congress was still debating. After the OBBBA passed on July 4, 2025, the CBO estimated the legislation would add approximately $1.4 trillion in new borrowing to the baseline over the 2025-2035 period, pushing debt-to-GDP projections even higher.

Interest payments on the federal debt are the fastest-growing part of the budget. The CBO projected that net interest costs would reach $1.2 trillion annually by 2035, consuming roughly 18 cents of every federal dollar — more than the government currently spends on Medicaid and more than it spends on all non-defense discretionary programs combined.

The United States last ran a surplus in fiscal year 2001, during the Clinton administration. Since 2016, deficits have grown faster than GDP in every year, meaning the country has been borrowing faster than the economy can grow. The Congressional Budget Office has documented this trend consistently since 2010.

The CBO is a nonpartisan agency created in 1974 to give Congress independent budget analysis

It does not make policy recommendations

Its job is to score legislation and project economic outcomes under current law Members of Congress from both parties have criticized specific CBO projections while relying on the agency for official cost estimates of their own bills.

Republicans have argued the CBO's deficit projections overstate actual deficits because they do not fully account for economic growth effects from deregulation, tariff revenue, and tax-cut-driven investment. The CBO's own track record shows its projections have underestimated deficits more often than overestimated them over the past two decades.

The PAYGO rules and the Byrd Rule in the Senate require that legislation not increase the deficit beyond a 10-year window without 60 votes. Republicans used the budget reconciliation process for the OBBBA, which requires only 51 votes but imposes strict limits on what can be included. The CBO score of $1.4 trillion in new debt was the official justification critics used to argue the OBBBA violated the spirit of reconciliation rules.

Economists across the ideological spectrum agree that debt at 117 percent of GDP creates risks — but disagree sharply on the severity. Progressive economists like those at the Economic Policy Institute argue the risk is manageable as long as interest rates stay below growth rates. Conservative economists at the Heritage Foundation and CATO argue high debt crowds out private investment and eventually forces tax hikes or benefit cuts.