CBO Director Warns Growth Alone Cannot Stabilize US Debt

Congressional Budget Office Director Phillip Swagel warned that economic growth alone is unlikely to stabilize the U.S. fiscal trajectory after the national gross debt reached $40 trillion. Speaking at a Federal Reserve Bank of Minneapolis conference, Swagel estimated that real GDP growth would need to reach 5% to 6% to keep the debt-to-GDP ratio flat, a target that significantly exceeds the current pace of 2.2%.

Swagel noted that while artificial intelligence may increase productivity, the budget deficit remains too deep for such growth to be sufficient. He cautioned that the U.S. faces a potential turbocharger effect, where interest rate shocks feed into deficits and debt, which in turn further drive up rates.

This assessment contradicts Treasury Secretary Scott Bessent, who previously argued that 3% growth would allow the U.S. to grow its way out of the debt crisis. Swagel maintained that because growth alone is insufficient, the government is left with changes in revenues and spending, which he characterized as inherently political choices.