Congress Now Does Far Less About Rising Debt Than It Once Did

Figure 1 compares the deficit reduction Congress enacted in each period over the last 40 years with the amount the pre-2004 rule predicts given the debt outlook Congress faced. In both of the most recent periods, Congress has fallen well short of it. Each point represents one half-year beginning in 1984, built from the CBO budget outlooks released in that half. The first half-year period is denoted “a” and the second is denoted “b.” The horizontal axis measures CBO’s projected average annual change in the debt-to-GDP ratio over the next five years as of the start of that half-year, and the vertical axis measures how legislation enacted during the half-year reduced the five-year primary deficit outlook. Both measures are adjusted for the business cycle, so the scorecard does not penalize Congress for supporting the economy during a downturn.1 

The blue line summarizes how Congress behaved before 2004. Points on the line represent the response predicted by the pre-2004 rule, given the projected path of the debt-to-GDP ratio. Points below the line indicate that Congress enacted less deficit reduction than the rule predicts, while points above it indicate that Congress enacted more. The vertical distance between a given point and the blue line is the scorecard’s measure of that Congress’s deviation. Most of the amber points lie below the line, so at the debt outlooks post-2004 Congresses faced, they typically enacted less deficit reduction than their pre-2004 predecessors would have. 

In 2026a, the pre-2004 rule predicted that Congress would cut the primary deficit by 0.47 percentage points of GDP. Instead, Congress increased the primary deficit by 0.03 percentage points. The gap between the pre-2004 rule’s prediction and the realized deficit change was 0.50 percentage points. 

The 2025b observation is an even larger outlier. OBBBA and other legislation enacted in that period increased the primary deficit by 1.47 percentage points of GDP, while the pre-2004 rule called for a 0.49 percentage point cut. The resulting 1.96 percentage point deviation is the largest among comparable periods since 1984. However, CBO records revenues from tariffs imposed by executive action as a technical rather than legislative change, meaning that this calculation excludes projected tariff revenues. The alternative 2025b* observation, also shown in Figure 1, treats these revenues as if they were legislated, dropping the fiscal deviation to 0.85 percentage points of GDP. Even with that adjustment, Congress enacted far less deficit reduction than its pre-2004 counterparts would have. 

Another way to visualize how Congress’s behavior has changed since 2004 is to plot the distribution of deviations from the pre-2004 rule. Figure 2 places the three recent periods, including both treatments of 2025b, within the distribution of Congress’s behavior since 1984. 

Figure 2 shows that Congress’s fiscal behavior shifted after 2004. Even after accounting for the business cycle and the fiscal conditions each Congress faced, the post-2004 observations generally show less deficit reduction than the pre-2004 rule predicts. The three latest periods show larger deviations than even the typical post-2004 Congress, and the 2025b observation covering OBBBA is the largest deviation among comparable periods. 

Each histogram shows how often, and by how much, Congress’s actions deviated from the pre-2004 rule. Positive values mean Congress enacted less deficit reduction than the rule predicts, while negative values mean Congress enacted more (corresponding to points below and above the blue line in Figure 1, respectively). 

The blue bars are centered on zero, as expected for the era used to estimate the rule, with 18 of the 39 observations above zero and 21 below. The amber bars carry more weight to the right of zero, indicating Congress frequently enacted less deficit reduction than the pre-2004 rule predicts. Indeed, the deviation from the rule is positive (deficits larger than pre-2004 behavior predicted) in 15 of the 21 post-2004 observations, and the post-2004 deviation averages about 0.3 percentage2 points of GDP. The post-2004 distribution has shifted to the right, so a performance that looks unremarkable by recent standards can still fall short of the pre-2004 rule and of what is required to keep the debt on a sustainable path. 

The recent observations sit in the right tail of both distributions. The 2025a and 2026a deviations, at 0.62 and 0.50 percentage points of GDP, are as large as or larger than 90% of the 60 observations from 1984b through 2024b, although each ranks at about the 76th percentile of the post-2004 distribution. The 2025b* line sits farther out at 0.85 percentage 2points of GDP, at roughly the 97th percentile of the combined distribution and the 95th percentile of the post-2004 distribution. The 2025b line, at 1.96 percentage points of GDP, falls entirely outside both distributions. Congress has enacted less deficit reduction than its pre-2004 predecessors would have in most periods since 2004, but the 2025b episode is exceptional even within that era. 

Table 1 applies that rule to CBO’s February 2026 ten-year baseline. The required reduction in the primary deficit starts at 0.28 percentage points of GDP in 2027, passes 1.5 percentage points in 2033, and reaches 1.70 percentage points in 2036. Over the decade it averages 1.17 percentage points of GDP per year. With this tightening, the average primary deficit falls from 2.08% to 0.92% of GDP and the debt-to-GDP ratio holds below 108% in 2036. In comparison, the CBO baseline projection is that the debt-to-GDP ratio will reach 120% by 2036. 

Those reductions are large by historical standards, not because the degree of required fiscal responsiveness is unusual by pre-2004 standards, but because the debt is rising so quickly in current projections. The 2027 down payment of 0.28 percentage points of GDP amounts to just over $1 trillion over ten years, less than half of the ten-year primary deficit increase from OBBBA. The 1.70 percentage points required by 2036 is comparable to the roughly 2% of GDP tightening enacted between 1986 and 1988, which is the largest three-year consolidation in the four decades of CBO data. 

The required correction has grown as the fiscal outlook has worsened. Auerbach and Yagan (2026) report that the primary deficit reduction required in year ten was 1.43% of GDP under CBO’s 2024 long-term outlook and 1.51% under the 2025 outlook; under the 2026 outlook used here, which is the first to incorporate OBBBA, it has risen to 1.70%, reflecting both the worsening outlook itself and the slightly stronger feedback rule that outlook requires. 

The Budget Lab will update the Deficit Management Scorecard with each new CBO budget outlook to track whether Congress begins to close the gap with its pre-2004 predecessors. 

The Budget Lab is grateful to Jessica Riedl for insightful feedback on an earlier draft.