The Congressional Budget Office projects U.S. federal government debt will rise to $31.4 trillion over the next ten years.
That would be equal to 98 percent of Gross Domestic Product, according to the CBO forecast published Tuesday. Federal debt has not been that high compared to GDP since the end of World War II.
The longer-term forecast sees debt rising to 180 percent of GDP by 2050, far above any prior level.
The CBO forecasts a federal budget deficit of $1 trillion this fiscal year, which runs through September. It projects the budget deficit to average $1.3 trillion per year over the next decade.
The CBO predicts the economy will grow at 2.2 percent this year.
There is good news for workers in the CBO report. Higher wages and salaries will result in higher government revenues than was forecast in earlier reports, the CBO said. The agency increased its estimate of revenues for 2020 by $45 billion, or 1.3 percent, and its projections for 2020 through 2029 by a total of $237 billion. The CBO expects corporate profits will be lower than earlier projections–due to rising labor costs–and as a result it lowered its expectation for corporate tax revenue.
“The unemployment rate reached its lowest point since the 1960s, and the overall labor force participation rate rose,” the CBO noted. “In addition, wage growth has been increasingly broad-based in recent years, with low wage earners seeing particularly robust growth in their hourly wages since 2016 and middle-wage earners seeing a moderate acceleration in their hourly wages last year.”