National Deficit Swells to $1.7 Trillion as Debt Nears 100% of GDP
WASHINGTON - The federal government’s budget deficit reached $1.7 trillion in fiscal year 2025, according to a recent analysis, pushing the national debt to nearly 100% of the nation’s Gross Domestic Product (GDP). This escalating financial strain raises concerns about the long-term health of the U.S. economy and potential impacts on future generations.
The FY 2025 deficit represents an average of 21.2% of GDP, significantly exceeding the 50-year past average and nearly double the 3% target considered necessary to stabilize the national debt. Debt held by the public climbed to 99.8% of GDP, approximately twice the historical average of 51% and a 21 percentage point increase in just six years. Projections indicate another 20 percentage point rise over the next decade. This sustained imbalance between spending and revenue is fueling a rapid accumulation of debt, potentially limiting future economic versatility and increasing borrowing costs.
The Committee for a Responsible federal Budget (CRFB) warns that the current trajectory is unsustainable. Lawmakers are urged to prioritize deficit reduction,aiming for a 3% of GDP target,and implement policies to put the debt on a downward path. Recommended actions include offsetting new spending or revenue changes twice over, addressing the solvency of critical trust funds like Social Security, Medicare, and highways, controlling healthcare costs, and enacting a combination of revenue increases and spending adjustments.
