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

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.

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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."