At the same time Congress and the new administration grapple with repealing the Affordable Care Act and with plans for big spending on infrastructure, the military, and a border wall with Mexico, the nonpartisan Congres­sional Budget Office (CBO) released a report on the outlook for the federal budget from 2017 to 2027. The good news in CBO’s report is that gross domestic product (GDP) is expected to grow at a higher rate at least over the next 2 years, boosting employment and “virtually eliminating the remaining slack in the economy.” After 2 years, growth will contract somewhat, mainly due to slow growth of the labor supply, according to CBO.

CBO’s projection for the federal budget deficit, however, looks grim. From 2017 to 2027, CBO expects federal debt to rise from $15 trillion to $25 trillion—equal to 77% and 89% of GDP, respectively. The chief causes for the gloomy outlook are strong growth in spending on health and retirement programs, rising interest payments on the debt, and modest growth of tax revenue.

Health programs, as in past CBO reports, are projected to remain a major driver of spending growth and deficits. Medicare will contribute 22% of the growth in federal spending 2017–2027. Social Security will cause 29%, interest on the national debt 19%, and all other programs, 30%.