Today the Congressional Budget Office (CBO) released its annual report on the federal government’s budget and economic outlook, and the text is sobering. In spite of recent improvements in the economy, annual federal deficits are projected to start increasing in 2017 with the publically-held federal debt reaching 100% of GDP, a level generally regarded as a dangerous debt level in 25 years.

As the official nonpartisan “scorekeeper” for Congress, CBO’s reports play an important role in guiding lawmakers on the costs and economic effects of proposed legislation. This report details the official baseline levels of spending, revenue, and deficits CBO calculates current law will cause for the next 10 years. The report also projects effects beyond the official 10-year window and analyzes the effects of likely changes in law, such as the extension of tax breaks that “are temporary” under current law but have routinely been revived in years past.

Statement from TCS President Ms. Ryan Alexander:

Congress’s budget scorekeepers confirmed what we already know. Increased revenues from the improving economy, slower health care cost growth, and restrained federal spending has worked in concert to hold down deficits. But you don’t have to look too far into the future to see trouble ahead. Deficits will exceed $1 trillion in 2025 when net interest to service the national debt will exceed $800 billion, far more than is being spent on the Pentagon. Lawmakers need to tackle the country’s pending fiscal challenges as the baby boomers age. At the same time, responsible infrastructure investments will need to be made. Now is the time to tackle comprehensive tax reform, Pentagon contracting and compensation issues, as well as entitlements.

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• Read the full CBO Report: The Budget and Economic Outlook 2015 – 2025
• TCS Weekly Wastebasket on the Budget Outlook:  Dividends of Doing it Differently