‘The nation’s finances have deteriorated’ since Trump took office, CRFB says, gaming out the scenarios up to a $28.5 trillion deficit
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The baseline scenario shows cumulative deficits reaching $22.7 trillion by 2035, and that’s if everything goes according to plan.
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August 21, 2025
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Economy·Deficit‘The nation’s finances have deteriorated’ since Trump took office, CRFB says, gaming out the scenarios up to a $28.5 trillion deficitBy Nick LichtenbergBy Nick LichtenbergFortune Intelligence EditorNick LichtenbergFortune Intelligence EditorNick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news.SEE FULL BIO President Donald TrumpAndrew Harnik—Getty Images“The nation’s finances have deteriorated” since President Trump took office, driven by sweeping legislative and trade policy changes, according to the Committee for a Responsible Federal Budget (CRFB)
The nonpartisan watchdog noted that the Congressional Budget Office’s January 2025 budget outlook “already showed a worrisome fiscal outlook,” but developments since mean a widening deficit
The CRFB gamed out several scenarios, including an adjusted baseline which accounts for “most legislative and administrative changes but not economic and nical changes.” The CRFB also included an alternative scenario in which the U.S
Trade Court’s ruling that many of Trump’s tariffs are illegal is upheld; temporary visions of the One Big Beautiful Bill Act are made permanent; and yields on Treasury securities remain at their current level
The adjusted baseline shows cumulative deficits are forecast to reach $22.7 trillion, amounting to 6.1% of GDP, with annual deficits climbing from $1.7 trillion in 2025 to $2.6 trillion in 2035
Meanwhile, it sees debt held by the public rising from 100% of GDP—currently $30 trillion—to 120% of GDP ($53 trillion)
Under the CRFB’s alternative scenario—where key OBBBA visions are made permanent, tariff revenues fall owing to legal setbacks, and interest rates remain elevated—debt could climb to 134% of GDP by 2035 and the 10-year deficit would exceed $28.5 trillion
Over fiscal years 2026 through 2035, net interest payments alone are set to total $14 trillion over the decade, nearly doubling from $1 trillion this year to $1.8 trillion by 2035
Expenditures are expected to grow, totaling $88 trillion (23.6% of GDP) for the decade, while revenues—spurred on by tariffs replacing some lost tax receipts—will reach $65 trillion (17.5% of GDP)
This persistent gap between spending and revenue underpins the widening deficit
The CRFB has previously weighed in on the tariffs’ impact on deficits, calling them both “significant” and “meaningful.” Policy changes: OBBBA and tariffs fiscal imbalance Central to the deteriorating outlook is enactment of the One Big Beautiful Bill Act (OBBBA), which the CRFB jects will increase deficits by $4.6 trillion over the next decade and push debt up by more than 10% of GDP by 2035
Meanwhile, a surge in tariffs ing administration policies is expected to offset some costs, saving $3.4 trillion in deficits and reducing debt by 8% of GDP over the same period
These savings are, however, at risk: The U.S
Court of International Trade ruled much of the tariff regime illegal in May, and if that decision stands, tariffs could duce less than $1 trillion in deficit reduction—adding $2.4 trillion to the federal deficit and increasing debt by 5.7% of GDP
Under the alternative scenario, annual deficit growth would be exacerbated by extensions of tax cuts and spending increases, combined with higher interest on the rapidly rising debt load
Also under this scenario, interest payments on the national debt, already surging from less than $500 billion in 2022, could hit $2.2 trillion (5.1% of GDP) annually by 2035 if interest rates stay high
The CRFB warns the outlook could be even worse if offsets built into OBBBA are delayed and new deficit-increasing posals— tariff rebates—are implemented, or if economic headwinds slow revenue collection
A recession or financial crisis over the next decade could further deepen deficits and add to the debt burden
The CRFB calls for lawmakers to prioritize revenue and spending options that put the federal budget on a sustainable path, emphasizing that any changes to tax and spending policies should be paid for at a minimum under a “pay-as-you-go” apach, and ideally under its own bespoke recommendation of “Super PAYGO,” which would require offsets that exceed new costs twofold
With debt heading toward record levels, the group argues for active solutions to trust fund solvency and corrective fiscal action
Republican leaders and Trump officials argue the OBBBA will reduce the deficit via two mechanisms: “Historic spending reductions,” credited in GOP Senate and administration releases with $1.5 trillion to $1.6 trillion in mandatory spending cuts, mainly in social grams
Economic growth jections: The White House and GOP claim the bill’s “-growth tax reforms” will unleash enough economic expansion to boost tax revenues by $4 trillion, turning a static deficit increase into a dynamic deficit reduction
No concrete detailed plan has been laid out that would balance the budget if the bill’s tax cuts are ext and the dynamic growth does not materialize
For this story, Fortune used generative AI to help with an initial draft
An editor verified the accuracy of the information before publishing
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