National debt nears $31 trillion as Congress considers new spending bill

The national debt is nearing $31 trillion with the Democrat-led Congress back in session to debate a spending bill to keep the federal government funded past Sept. 30.

The Congressional Budget Office has estimated that the debt will reach 110% of GDP in 2032 — higher than it has ever been — and 185% of GDP in 2052.

"Moreover, if lawmakers amended current laws to maintain certain policies now in place, even larger increases in debt would ensue," read the Budget and Economic Outlook: 2022 to 2032.

"Debt is projected to rise in relation to GDP mainly because of increasing interest costs and growth in spending for Medicare and Social Security," the CBO explained. 

The deficit hit a record $3.1 trillion in FY2020, driven by COVID-19 stimulus spending. It dropped slightly to $2.8 trillion in FY2021 as the pandemic continued. The deficit is projected to be $1 trillion for FY2022, according to the CBO.

When President Biden took office in January 2021, the national debt was $27.7 trillion. The national debt is currently $30.9 trillion, according to the latest Treasury Department data. 

Under Biden, the Democrat-led Congress passed the $2 trillion American Rescue Plan, a coronavirus stimulus bill, on a party-line vote using budget reconciliation to avoid a Senate filibuster. 

Congress also passed a $2 trillion bipartisan infrastructure bill that will increase deficits by about $400 billion, according to CBO figures. Biden also signed the CHIPS bill, which the CBO estimates will raise deficits about $80 billion.

Congress later passed the PACT Act on a bipartisan vote. The measure expands health care coverage for war veterans who were exposed to burn pits in Iraq and Afghanistan. The Committee for a Responsible Federal Budget (CRFB) has estimated that the legislation will raise deficits by at least $277 billion over 10 years.

Biden recently signed the $740 billion Inflation Reduction Act, which includes about $380 billion for climate-related initiatives as well as an expansion of Obamacare subsidies and a program designed to lower prescription drug costs for seniors.

The Tax Foundation and CRFB have projected the legislation will reduce the deficit between $174 billion and $300 billion over 10 years due to the tax increases in the bill and additional tax collection as a result of the $80 billion in new federal funding for the IRS.

In late August, Biden announced that his administration was unilaterally implementing a student debt forgiveness program of up to $20,000 per eligible borrower. Budget watchdogs estimate that the White House student debt forgiveness program will raise the national debt by up to $600 billion.