Article Synopsis
The upcoming U.S. presidential election will see the new president facing a growing national debt projected to reach over $50 trillion by 2034. The Congressional Budget Office (CBO) reports widening budget deficits, with debt as a percentage of GDP expected to rise from 99% to 122% by 2034 and potentially 166% by 2054. This escalating debt increases the risk of a fiscal crisis, with rising interest rates and challenges in servicing the debt.
Fiscal policy deadlines in 2025 present an opportunity for reform, including the reactivation of the debt limit, expiration of spending caps, and sunset provisions of the Trump tax cuts. Experts emphasize the need for bipartisan cooperation to address the fiscal situation and consider reforms to Social Security and Medicare, which face the potential depletion of their trust funds within the next decade. The Fiscal Commission Act, a bipartisan proposal, aims to stabilize the debt-to-GDP ratio and improve the solvency of trust funds. Despite political differences, addressing the fiscal challenges sooner rather than later is crucial to avoid worsening the situation.
