Associated Press, by Fatima Hussein and Josh Bork
WASHINGTON (AP) — Population growth and government spending will slow overall economic growth over the next 30 years, the Non-partisan Congressional Budget Office said Thursday.
The CBO’s latest Long-Term Budget and Economic Outlook Report (for periods ranging from 2025 to 2055) projects publicly held debt to reach 156% of GDP in 2055.
But that’s not necessarily positive.
A mix of slow population growth and free spending will weaken economic growth over the next 30 years than what CBO predicted last year. A decline in fertility also means that the US is more dependent on immigrants who work to maintain growth.
“Without immigration, the US population will begin to shrink in 2033,” the CBO report states.
The report assumes that all laws, including certain provisions for Trump’s 2017 tax cuts, are expired. However, White House and Republican lawmakers say tax cuts could be updated and potentially expanded, suggesting increased revenues from cutting government spending and taxing imports.
Yet, the report’s warnings and forecasts for the future set the stage for debt, government spending and economic growth agendas.
Bessent is advocating a “3-3-3” plan that reduces the federal government’s fiscal deficit to 3% of GDP, increases inflation-adjusted annual GDP growth to 3%, and equals 3 million barrels of oil per day by 2028.
The Treasury Secretary attempts to discredit CBO’s scoring, calling it “crazy.”
“I was in the investment business for 35 years, and I thought I knew how crazy CBO scores were,” Bescent told CNBC earlier this month. “And now, I’m on the other side of the wall, so I can say it’s really crazy. And I rarely get credits on CBO scoring for customs.”
But the CBO’s warning about population growth into a Trump administration policy priorities related to mass deportation as immigrants argue that they are promoting high inflation by exacerbating housing shortages and depriving American citizens of employment opportunities.
A decline in population can have a major negative impact on the economy as growth depends on adding workers and increasing productivity. A decline in population levels can cause stagnation in living standards and create difficulties in causing funding programs such as debt repayments and social security that rely on payroll taxes.
The report is because the United States is on track to hit the so-called X-day statutory debt cap, as the state travels to pay bills as early as August without a transaction between Congress and the White House.
This week, the CBO and the bipartisan policy centers detailed forecasts between July or August, respectively, forcing the US to reach their statutory debt caps over the summer of this year.
Original issue: March 27, 2025, 2:21pm EDT
