Merkley Asks CBO To Examine the Long-Term Impact Higher than Expected Interest Rates Would Have on the National Debt

Merkley Asks CBO To Examine the Long-Term Impact Higher than Expected Interest Rates Would Have on the National Debt

WASHINGTON, D.C. - Today, U.S. Senator Jeff Merkley (D-OR), Ranking Member of the Senate Budget Committee, calls on the nonpartisan Congressional Budget Office (CBO) to examine how the One Big, Beautiful Bill Act, the Republican signature undertaking that stripped health care and food assistance from families to give tax cuts to the wealthy, would affect the federal debt over the next 30 years. Merkley also asked how the debt would be impacted if interest rates rose even 1 percent more over this time period than under CBO's baseline projections and how much faster the economy would grow if Congress acts to stop the growth of the national debt.

CBO's previous analysis was published in May 2025, but before OBBBA was enacted making the deficit and debt's growth much worse.

"[The Republican One Big, Beautiful Bill Act] further worsened the nation's unsustainable debt trajectory, leading to a future where higher debt and interest payments crowd out economic growth, as well as critical investments in housing, health care, education, and infrastructure," wrote Merkley.

The full letter is HERE or below.

Dear Director Swagel,

Thank you for the Congressional Budget Office's past work to analyze the One Big, Beautiful Bill Act, the most expensive reconciliation bill in history. That bill further worsened the nation's unsustainable debt trajectory, leading to a future where higher debt and interest payments crowd out economic growth, as well as critical investments in housing, health care, education, and infrastructure.

In a 2025 report entitled The Long-Term Budget Outlook Under Alternative Scenarios for the Economy and Budget, CBO examined the debt situation over the next 30 years, including what would happen if interest rates rose higher than expected. It also showed how much faster the economy would grow if the national debt's growth were stabilized so it no longer grew faster than the economy. However, that report was published before Republicans enacted the One Big, Beautiful Bill Act, which you said in February increased the budget deficit by $4.7 trillion through 2035.

I request that CBO update several scenarios from its 2025 analysis. First, by how much is debt projected to grow over the next 30 years, and how does that compare with CBO's 2025 report?

Second, by how much would debt grow if interest rates are higher than CBO expects? Please examine a scenario where interest rates rise to 1 percentage point higher than CBO's projections and remain elevated for the full 30-year projection window.

Third, please examine a scenario in which debt is stabilized as a share of GDP at its current level. By what amount would primary deficits need to be cut? How much would spending need to be cut or revenue raised to achieve that? How much faster would the economy grow per person?

Sincerely,

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