As the government increases debt, it puts upward pressure on interest rates. In their July long-term economic projections, CBO expects the interest rate on all federal debt rises from 2.5% in 2023 to 3.4% by 2034 and to 3.8% by 2054.

The recommendations outlined here would reduce debt by a massive 56% of GDP by 2054. Based on CBO analyses, this plan uses a conservative estimate and assumes gradually reduced interest rates, leading to a reduction of 100 basis points by 2054.  The reduction in interest rates from lower federal debt would produce an additional 11.3% reduction in debt relative to GDP.