Federal report predicts massive deficits will skyrocket in the next 30 years

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Some Good News on America's National Debt

The Congressional Budget Office predicted in its annual report released on Tuesday that the U.S. will face steadily increasing federal budget deficits and debt over the next 30 years if drastic spending changes are not implemented.

The report from the CBO found that the debt held by the public has skyrocketed from 39 percent of GDP at the end of President George W. Bush's final term in office, to 75 percent of GDP since then. The report notes that the financial crisis and recession that spanned from the end of Bush's time in office into President Barack Obama's played a factor in the jump.

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Based on current spending and tax plans, the federal debt is expected to grow to 141 percent of GDP by 2046, which would exceed the all-time record of 106 percent that came just after World War II.

While this might appear ominous, the outlook has improved since 2010, when the CBO predicted that the debt could surge as high as 109 percent of GDP by 2025 and potentially 185 percent in 2035. The CBO's debt projection for 2046 is also now 14 percentage points lower than it was in January, because interest rates are expected to be lower than previously anticipated.

Social Security and rising health care costs to care for an aging population are the two primary reasons spending is expected to rise so drastically. Lawmakers in Washington have yet to address those spending increases either with modified coverage plans or tax increases, the report notes.

RELATED: See how much the US spends with the biggest defense contractors:

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Top 9 biggest defense contractors in America (BI)
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Top 9 biggest defense contractors in America (BI)

1. Lockheed Martin Corporation

Amount obligated: $29.4 billion

Contracts awarded: 66,353

Employees: 126,000

Current work: $528 million project for interceptors in the Terminal High Altitude Area Defense (THAAD) missile defense-contract. The purpose of the THAAD system is for protection from short to medium-range ballistic missile attacks.

(SAUL LOEB/AFP/Getty Images)

2. The Boeing Company

Amount obligated: $14.6 billion

Contracts awarded: 12,645

Employees: 148,750

Current work: $897.5 million for additional EA-18Gs and associated airborne electronic attack kits. The "Growler" is supposed to provide tactical jamming and electronic protection for military personnel.

REUTERS/Murad Sezer/Files

3. Raytheon Company

Amount obligated: $12.3 billion

Contracts awarded: 10,000

Employees: 61,000

Current work: $31.8 million contract for 464 Excalibur extended-range precision projectiles. Using its GPS capabilities, the Excalibur is considered to be the longest-range, most precise, cannon-fired projectile in the world.

REUTERS/Lucas Jackson 

4. General Dynamics Corporation

Amount obligated: $11.8 billion

Contracts awarded: 20,822

Employees: 99,500

Current work: $644.3 million for constructing an additional DDG 51 Class Destroyer for the US Navy. The all-steel, gas turbine ship is equipped with the AEGIS combat system, Vertical Launching System, an advanced anti-submarine warfare system, two embarked SH-60 helicopters, advanced anti-aircraft missiles, and Tomahawk anti-ship and land-attack missiles.

(Photo by Mass Communication Specialist 2nd Class Carlos M. Vazquez II/U.S. Navy via Getty Images)

5. Northrop Grumman Corporation

Amount obligated: $9.5 billion

Contracts awarded: 10,397

Employees: 65,000

Current work: The $55 billion controversial and highly classified Long-Range Strike Bomber (LRS-B) project was designed to replace the Air Force's aging fleets of bombers. The LRS-B would be able to deliver its nuclear payload while using its signature stealth technology.

REUTERS/Mike Blake 

6. United Technologies Corporation

Amount obligated: $6.6 billion

Contracts awarded: 24,626

Employees: 197,200

Current work: $1.04 billion contract for an additional batch of F-35 fighter jet engines. Although the jet engines were plagued with issues, Pratt & Whitney states that the engine's reliability rate is now at 90 percent. This multi-role fighter jet has been claimed by many military officials to be the best candidate for air-to-ground strike missions. 

(ROBIN VAN LONKHUIJSEN/AFP/Getty Images)

7. L-3 Communications

Amount obligated: $5 billion

Contracts awarded: 7,622

Employees: 38,000

Current work:  Since 2001, the Pentagon had awarded $24 million to EOTech, a subsidiary of L-3, for the purchase of their holographic optical sights. The sights have since been deemed defective due to their inability to perform optimally in extreme temperatures. Further, claims have been made that EOTech had waited to disclose the defect until 2013. L-3 Communications has since settled the case for $25.6 million.

Luke Sharrett/Bloomberg via Getty Images

8. BAE Systems

Amount obligated: $4.2 billion

Contracts awarded: 10,133

Employees: 83,400

Current work: $245.3 million project for the initial production of the M109A7 self-propelled howitzer and M992A3 ammunition carrier for the US Army. The M109A7 upgrades the previous Paladin howitzer with a new chassis, and includes a high-voltage gun drive and a projectile ramming system.

Luke Sharrett/Bloomberg via Getty Images

9. Humana Inc.

Amount obligated: $3.5 billion

Contracts awarded: 206

Employees: 52,000

Current work: This Fortune 500 health insurance company provides healthcare services to servicemembers and veterans as part of the DoD's TRICARE program. Aetna, one of the largest health insurers has since agreed to acquire Humana for $37 billion. The acquisition is pending federal approval.

Ty Wright/Bloomberg via Getty Images
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"As members of the baby-boom generation age and as life expectancy continues to increase, the percentage of the population age 65 or older is anticipated to grow sharply, boosting the number of beneficiaries of those programs," the report reads.

The CBO warns that the current trajectory is untenable. "The prospect of such large debt poses substantial risks for the nation and presents policymakers with significant challenges."

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