U.S. deficit to hit $1.85 trillion in 2026, debt to soar to 120% of GDP by 2036, CBO warns.

The Congressional Budget Office projects the U.S. budget deficit will reach $1.853 trillion in 2026 and average 6.1% of GDP over the next decade, driven by tax cuts, rising entitlement spending, and soaring interest costs. Federal debt is expected to climb to $56.152 trillion by 2036—120% of GDP—surpassing the post-WWII peak. Interest payments will more than double to $2.1 trillion annually by 2036, outpacing economic growth, which is forecast at 1.8% annually. While tariffs are projected to generate $3 trillion in revenue, they may fuel inflation. The CBO warns the fiscal trajectory is unsustainable, with deficits and debt growing faster than revenue, limiting investments in infrastructure and education.