Interest on national debt could threaten U.S. economic stability, CBO director tells House panel

• The leader of the Congressional Budget Office warned House members of the rising national deficit and interest costs at a hearing Wednesday.
• A Feb. 7 CBO report projected that the yearly U.S. budget deficit would grow by an estimated $1 trillion over the next 10 years.
• "Under current law, there would be not enough resources to pay the promised benefits of social security," CBO Director Phillip Swagel said.

The director of the nonpartisan Congressional Budget Office warned House lawmakers Wednesday that the ballooning national debt and the cost of paying interest on it could become an existential threat to the U.S. economy.

"Rising interest costs will crowd out other possible uses of government resources, and then also pose a risk to our economic stability" in the coming decade, CBO director Phillip Swagel told the budget committee at a hearing on Capitol Hill.

Swagel's testimony centered around CBO's semi-annual report on the federal budget and the economy, released Feb. 7.

The CBO report projected that the yearly U.S. budget deficit would grow by an estimated $1 trillion over the next 10 years. The deficit, which is expected to total $1.6 trillion in fiscal year 2024, will grow to $2.6 trillion in 2034, according to the analysis.

The report also predicted that net interest as a percentage of gross domestic product will surpass non-defense discretionary spending in 2024, and will climb to 3.9% in 10 years.

Swagel said high interest rates, an aging population and growth in federal healthcare costs are all contributing to the growing national debt, which is projected to climb to a record 116% of GDP by the end of 2034.

"Under current law, there would be not enough resources to pay the promised benefits of social security,"