US debt set to break World War II record sooner than expected under GOP spending plan

The bill, if passed, would extend and expand the Trump-era tax cuts and ramp up military expenditures, with offsetting cuts in areas like Medicaid and energy credits. Still, budget experts say these savings would be dwarfed by the cost of the tax breaks.

Debt to surpass size of economy—and keep climbing

The Congressional Budget Office estimates that without any new policy changes, debt will reach 117% of gross domestic product (GDP) by 2034. The Republican bill could push that to as high as 129%, according to projections by the nonpartisan Committee for a Responsible Federal Budget. Even under more conservative assumptions, where temporary tax cuts expire, the debt would still reach 125% of GDP.

A more long-term projection by the liberal Center for American Progress shows an even bleaker picture: if all temporary provisions are made permanent, the debt could hit 200% of GDP by 2055.

Cost of borrowing adds pressure

Rising interest rates are compounding the debt problem. The government is now spending more on interest payments than on defence or Medicare. Moody’s recently downgraded its outlook on US government debt, citing concerns about the rising fiscal burden and political instability. The downgrade signals a growing risk that the US might, at some point, struggle to meet its debt obligations.

Economists like Natasha Sarin of the Yale Budget Lab warn that the US is inching closer to a tipping point. “A crisis always feels far off until you’re in one,” she said. “We don’t know exactly where that cliff is—but we know that we’re getting closer.”

GOP defends tax cuts, but analysts disagree

Some Republicans have dismissed the warnings, arguing that tax cuts will spur enough economic growth to offset their cost. But independent analysts across the spectrum have found little evidence to support that view. The Committee for a Responsible Federal Budget, the Congressional Budget Office, and other nonpartisan institutions say the tax breaks will add significantly to the deficit.

Even past promises of fiscal responsibility have often gone unmet. Debt increased under both Democratic and Republican administrations—from President George W. Bush’s wars and tax cuts, to President Obama’s stimulus packages, to Trump’s tax cuts and pandemic aid, and Biden’s infrastructure and health care spending.

A record no one wants to break

While the precise trajectory remains uncertain, the direction is clear: federal debt is on course to shatter records and keep climbing. And unlike 1945, there is no postwar boom waiting on the other side. With growing doubts about whether Congress will curb the trend, America could soon face a debt burden far larger — and riskier — than at any point in its modern history.