SOURCE: Data from the Office of Management and Budget, The Budget of the United States Government, Fiscal Year 2012 Historical Tables: February 2011; and the Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2012 to 2022: January 2012, Compiled by PGPF.
The Congressional Budget Office (CBO) provides two perspectives of the budget through 2022. Under the current law baseline, the federal debt would rise from 72 percent of gross domestic product (GDP) to 75 percent in 2013 and 2014, and then fall to 62 percent in 2022 as recovery gradually takes hold and economic improvement outpaces the growth in debt. This outlook assumes that several popular policies--including the 2001/2003/2009 individual income tax cuts--would expire as scheduled and that discretionary spending would fall to 5.6 percent of GDP. Because lawmakers are generally expected to reject such significant changes, CBO provides an alternative baseline that assumes that many current policies continue. Under this current-policy scenario, over the next decade, the debt would climb to 94 percent of GDP, a level that many economists believe is risky to economic growth. This increase in debt results in an almost tripling of interest costs as a percentage of the economy, rising from 1.4 percent of GDP this year to 3.8 percent by 2022.
This chart appeared as a part of PGPF's analysis of the January 2012 report by the Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2012 to 2022. To read the full report, click here.
Peter G. Peterson Foundation Chart Pack:
The PGPF chart pack illustrates that budget-making involves many competing priorities, limited resources, and complex issues. In this set of charts, we aim to frame the financial condition and fiscal outlook of the U.S. government within a broad economic, political, and demographic context.
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