CAN AMERICA AFFORD ITS FUTURE?

WHAT THE BUDGET NUMBERS SHOW

Debt Chart

The Peter G. Peterson Foundation (PGPF) released its Chart Pack: The U.S. Budget in August 2025, offering a clear look at how America raises and spends money. The federal government faces a long-term imbalance: it spends much more than it collects, leading to persistent deficits and rising debt.

Most of the budget—about 65%—goes to mandatory spending on programs like Social Security, Medicare, and Medicaid. Social Security costs $1.4 trillion in 2024, while Medicare and Medicaid together cost $1.6 trillion. Discretionary spending—about 25% of the budget—covers areas such as defense, education, and transportation. Defense dominates, totaling $850 billion in 2024. The final share is interest on the national debt, which reached $660 billion in 2024—more than federal Medicaid spending—and could rise above $1 trillion a year by 2033.

The U.S. ran a $1.6 trillion deficit in 2024, equal to 5.6% of GDP, and the CBO projects 6.1% in 2025. Public debt stood at $27 trillion in 2024 (99% of GDP) and is expected to climb to $45 trillion by 2034 (116% of GDP). By then, nearly 20% of federal revenues could go just to interest payments, compared with 13% today.

Revenue is not keeping up. In 2024, federal revenues equaled 17.6% of GDP, slightly below the long-term average of 18%. The bulk came from individual income taxes ($2.2 trillion) and payroll taxes ($1.5 trillion). But as America’s population ages, the number of seniors will rise nearly 50% from 2020 to 2040—costs for Social Security and Medicare will grow sharply. Without reforms, the Social Security trust fund will be depleted by 2033, triggering an automatic 23% cut in benefits.

The takeaway from the Chart Pack is clear: spending growth in entitlement programs and rising interest costs are outpacing revenues, creating unsustainable deficits. Unless action is taken, debt will surpass 116% of GDP within a decade, and interest will consume over $1 trillion annually, crowding out other national priorities.

Chart Pack: The U.S. Budget (PGPF)

Budget and Economic Data (CBO)

How much has the U.S. government spent this year? (Fiscal Data)