The committee for a responsible federal budget’s (CRFB) latest forecasts show a cumulative deficit of US$22.7 trillion from fiscal 2026 to 2035, compared to the CBO’s January forecast of US$21.8 trillion, which was based on laws and policies that were in place before US President Donald Trump took office in January.
The CBO, Congress’s non-partisan budget referee agency, said on Monday that it will not issue its customary mid-year budget update this year and will issue its next 10-year budget and economic outlook in early 2026, offering no explanation for the move.
The CRFB, which advocates for deficit reduction, projected a US$1.7 trillion deficit in fiscal 2025 or 5.6% of GDP, down slightly from US$1.83 trillion in 2024 and the CBO’s 2025 projection of US$1.87 trillion in January.
However, it said deficits steadily rise over the decade, reaching US$2.6 trillion or 5.9% of GDP by 2035.
The new CRFB estimates include the budget effects of the One Big Beautiful Bill Act tax and spending bill, as well as Trump’s tariffs that are currently in place.
However, like CBO, they do not include the dynamic economic effects on growth from these changes, a forecasting rule that has drawn criticism from the Trump administration.
The group projects the tax cut and spending bill to increase deficits, including interest, by US$4.6 trillion through 2035, adding another year to the CBO’s US$4.1 trillion cost estimate through 2034.
However, CRFB estimates that this will be offset by US$3.4 trillion worth of extra import duty revenue over the next decade due to Trump’s new tariffs that are currently in place.
“New rules restricting eligibility for health insurance subsidies will reduce deficits by another US$100 billion through 2035, and Congress’ rescission of prior funding to foreign aid, public broadcasting and other programmes would save another US$100 billion if sustained over a decade,” CRFB said.
Net interest payments on the national debt will total US$14 trillion over the decade, CRFB projected, rising from nearly US$1 trillion or 3.2% of GDP in 2025 to US$1.8 trillion or 4.1% of GDP in 2035.
Tariff challenge
The forecasts are based on legislative and tariff changes since January but keep CBO’s economic forecasts unchanged.
Under an alternative scenario forecast by CRFB, the budget picture looks far worse, boosting deficits nearly US$7 trillion higher than the CBO baseline.
This scenario would see a significant part of Trump’s tariffs canceled if the court of international trade’s ruling against many of Trump’s new tariffs is upheld, cutting US$2.4 trillion from revenues over a decade.
The alternative scenario also assumes extension of a number of temporary tax cuts in the One Big Beautiful Bill Act, including tax breaks on overtime, tips, Social Security income and car loan interest, higher state and local tax deduction allowances and full expensing of factory investments, adding US$1.7 trillion to deficits over 10 years.
CRFB’s alternative scenario also ditches the CBO’s projection of a decline in 10-year US treasury yields over the decade to about 3.8%.
“If that interest rate stays at the current level of about 4.3%, interest costs would grow by about US$1.6 trillion through 2035,” CRFB said.
The total 2035 debt-to-GDP ratio would grow from 118% in the CBO January baseline to 120% under the CRFB’s projected baseline scenario and 134% under the CRFB’s alternative scenario.