WASHINGTON (AP) — The nonpartisan Congressional Budget Office’s 10-year outlook projects worsening long-term federal deficits andrising debt,driven largely byincreased spending, notably on Social Security, Medicare, and debt service payments.

Compared with the CBO’sanalysis this time last year, the fiscal outlook has deteriorated modestly.

Major developments over the last year are factored into the latest report, released Wednesday, including Republicans’ tax and spending measure known as the “One Big Beautiful Bill Act,” higher tariffs, and the Trump administration’s crackdown on immigration, which includes deporting millions of immigrants from mainland U.S.

As a result of these changes, the projected 2026 deficit is about $100 billion higher, and total deficits from 2026 to 2035 are $1.4 trillion larger, while debt held by the public is projected to rise from 101% of GDP to 120% — exceeding historical highs.

Notably, the CBO sayshigher tariffspartially offset some of those increases by raising federal revenue by $3 trillion, but that also comes with higher inflation from 2026 to 2029.

Rising debt and debt service is important because repaying investors for borrowed money crowds out government spending on basic needs such as roads, infrastructure and education, which enable investments in future economic growth.

Congressional Budget Office projections also indicate that inflation doesn’t hit theFederal Reserve’s 2% target rate until 2030.

Jonathan Burks, executive vice president of economic and health policy at the Bipartisan Policy Center said “large deficits are unprecedented for a growing, peacetime economy” though “the good news is there is still time for policymakers to correct course.”

“We encourage lawmakers to work together to explore options for raising revenue, trimming spending, and slowing the growth of the major cost drivers,” Burks said, “Congress and the administration should seize the opportunity to act now before the available menu of choices becomes much more painful.”

Lawmakers have recently addressed rising federal debt and deficits primarily through targeted spending caps and debt limit suspensions, as well as deploying “extraordinary measures” when the U.S. is close to hitting its statutory spending limit, though these measures have often been accompanied by new, large-scale spending or tax policies that maintain high deficit levels.

Source: Fast Company