A man sits at a bus stop displaying the national debt in downtown Washington, D.C., a few blocks from the White House, on May 29. File Photo by Pat Benic/UPI | License Photo
Sept. 22 (UPI) -- The United States will need to cut spending by at least $900 billion per year over the next few decades to restore the national deficit to its 2019 level, according to a report by the Congressional Budget Office.
Otherwise, the debt could reach never-before-seen highs.
The 2020 Long-term Budget Outlook, released Monday, said the U.S. government will need to increase revenue and cut non-interest spending to make up about 3.6% of the gross domestic product each year from 2025 to 2050. That would reduce the debt to 79% of the GDP by 2050, the same share it was in 2019.
With the economic fallout caused by the COVID-19 pandemic, the CBO projects the United States will have a deficit of 98% of the GDP by the end of 2020 -- up from about 35% in 2007, before the last recession.
The government would have to reduce spending by 2.9%, or $730 billion per year, from 2025 through 2050 to reduce the deficit back to 2020 levels, about 100%, the report said. If debt continues to rise, it could reach 195% by 2050, topping the last previous high of about 106% after World War II.
CBO Director Phill Swagel said the long-term fiscal challenges facing the United States are "daunting" in the wake of the coronavirus pandemic, but emphasized that there's no "immediate fiscal crisis."
"The current low interest rates indicate that the debt is manageable for now and that fiscal policy could be used to address national priorities, if the Congress chose to do so," he said.
"In our projections, interest rates remain low for several years as the economy recovers from the effects of the pandemic, partly because the Federal Reserve is working to keep them low."
Swagel encouraged Congress to adopt policies to go into effect in 2025 to lower the national debt.
"Waiting longer would require larger changes and impose a still-greater burden on future generations," he said.