America's debt burden may remain larger than its economy.
The nonpartisan Congressional Budget Office projects public debt above annual GDP, with consequences for future budget choices.
Bad outcome probability
US federal debt held by the public will exceed 100% of annual GDP at the end of fiscal year 2027.
Debt figures are often discussed without explaining their definition. Gross federal debt includes obligations between government accounts; debt held by the public is the metric that more directly describes borrowing from investors and other holders outside the federal government's own accounts.
The Congressional Budget Office's February 2026 outlook places federal debt held by the public at about 101% of gross domestic product in 2026 and projects further increases over the decade. It therefore supports our forecast that the ratio remains over 100% in fiscal 2027. We do not imply the country is unable to pay its bills or that an immediate financial crisis is certain.
Ratios can change through legislation, economic growth or interest rates, and the forecast is conditional on the CBO's baseline. The significance of persistent high debt is the limited room it may leave for future choices if borrowing costs rise or the economy weakens.
What this could mean.
- Why this could be bad
- High debt and interest spending can crowd out choices about services and resilience.
- Possible repercussions
Debt-service costs could consume a larger budget share.
Fiscal debates may become more contentious during economic stress.
Future lawmakers may face harder tradeoffs between taxes, spending and borrowing.
The assessment.
- What we are forecasting
- US federal debt held by the public will exceed 100% of annual GDP at the end of fiscal year 2027.
- Time horizon
- End of US fiscal year 2027, using the CBO debt-held-by-public to GDP ratio.
- Editorial confidence in the evidence: 99%
- CBO projected debt held by the public at 101% of GDP in 2026, growing over the following decade under current-policy assumptions.
- What could change the outcome
- Growth, inflation, tax laws, spending decisions and changes in fiscal accounting can alter the ratio.
The evidence.
- The Budget and Economic Outlook: 2026 to 2036 ↗Congressional Budget Office · 2026-02
- IMF says higher bond yields underscore urgency of fiscal consolidation ↗Reuters · 2026-10-14