CBO Director Says US Needs 5% to 6% Growth to Curb Debt

The United States would need annual real gross domestic product growth of 5% to 6% to stabilize its national debt through economic expansion alone, Congressional Budget Office Director Phillip Swagel said during a discussion with Minneapolis Federal Reserve President Neel Kashkari on October 8, 2026. Swagel estimated that nominal GDP growth would need to reach 7% to 8% if interest rates remained between 4% and 5%, while emphasizing that changes to federal revenue and spending would also be necessary.

According to reporting by TokenPost, Swagel described the figures as rough calculations rather than formal CBO projections. The estimates significantly exceed the US economy's 2.2% annualized real GDP growth in the second quarter of 2026, which covered April through June.

Swagel said economic expansion could improve federal finances by increasing tax revenue, but stronger growth could also raise government spending and borrowing costs. Higher wages may increase Social Security payments, while rising interest rates can make servicing outstanding debt more expensive.

Addressing the limits of economic growth as a fiscal solution, Swagel said, "So growth will help, but it's probably not plausible that growth alone will stabilize our fiscal trajectory," according to TokenPost.

He added that decisions about government revenue and expenditure would remain central to addressing the country's debt trajectory. Stronger economic activity does not automatically translate into a sustainable budget when spending obligations and interest costs also increase.

Swagel said, "So then we're left with changes in revenues and changes in spending, and those are inherently political choices," according to TokenPost.

The CBO's baseline projections show federal debt held by the public increasing from 101% of GDP in 2026 to 120% in 2036. The agency also projects that the federal budget deficit will grow from $1.9 trillion in fiscal 2026 to $3.1 trillion in 2036.

The CBO baseline assumes the 10-year Treasury yield will average 4.3% between 2026 and 2036. In a scenario where interest rates are 150 basis points higher, the average 10-year Treasury yield would reach 5.8%, and debt held by the public would rise to 133.1% of GDP by 2036.

Data cited by UA.News put total US gross public debt at $40 trillion, while debt held by the public stood at approximately 100% of GDP. The outlet also reported that the CBO expects the debt-to-GDP ratio to reach 120% in 2036.

US Treasury Secretary Scott Bessent previously said economic growth of 3% could help the country overcome its debt problem. However, the 5% to 6% growth estimate cited by Swagel is substantially higher than that target and current economic performance.

Separate analysis from the Penn Wharton Budget Model estimated that maintaining the debt-to-GDP ratio would require growth rates averaging 3.5% to 4% over a decade, according to UA.News. The outlet also reported Swagel's estimate that a one-percentage-point increase in the debt-to-GDP ratio is associated with a 0.015-percentage-point rise in long-term interest rates.

During the October 8 discussion, Swagel also noted that national debt concerns were not having a major effect on Treasury yields at the time, according to Bloomingbit. He warned that the direction of US fiscal policy could nevertheless place upward pressure on interest rates in the future.