"The CBO projects that if current laws governing taxes and spending generally remained unchanged, the federal budget deficit, measured in relation to gross domestic product (GDP), would nearly triple over the next 30 years," the report said on Wednesday. "Measured in relation to gross domestic product (GDP), federal debt held by the public dips over the next two years but then rises, reaching 110% at the end of 2032 - the highest it has ever been. Debt continues to climb thereafter and reaches 185% of GDP at the end of 2052."
The United States' rising debt could have very significant economic-financial consequences that can slow economic growth, drive up interest payments to foreign holders of US debt, elevate the risk of a fiscal crisis, increase the likelihood of less abrupt adverse effects and make the US fiscal position more vulnerable to an increase in interest rates, the report said.
In addition, such an economic environment can cause lawmakers to feel much more constrained in their policy choices, the report also said.
The growing deficits are projected to substantially drive up federal debt held by the public, the report said, adding that the projected growth in deficits is largely driven by increases in interest costs.
Deficits are expected to average 7.3 percent of GDP, more than twice the average, over the past 50 years, the report also said.
The developments taken together will accelerate the likelihood of a fiscal crisis, increase uncertainty and leave the United States' fiscal position more vulnerable to increased interest rates and box in lawmakers in the palette of policy choices, according to the report.