The Congressional Budget Office, a nonpartisan entity, projected how the national debt held by the public would grow if the Tax Cuts and Jobs Act were made permanent. Their analysis suggested that the debt could rise above 200% of the GDP by 2047 and reach 250% by 2054. This projection takes into account the potential impact of increased borrowing costs due to the higher debt burden.

President Donald Trump's tax cuts, set to expire this year, are being advocated by him and senior Senate Republicans to be made permanent. Concerns from some fiscal conservatives prompted a request to the CBO to evaluate the effects of such a decision on the national debt.

In its response, the CBO indicated that if the tax cuts were extended permanently without changes to fiscal policies, the debt held by the public could reach 214% of GDP in 2054. Furthermore, if borrowing costs continue to rise, the debt would surge to 204% of GDP by 2047 and surpass 250% by 2054.

Currently, the total US debt stands at $36 trillion, with public debt around $29 trillion. Servicing US debt already costs over $1 trillion annually, exceeding the Pentagon's budget, and contributing to the debt burden. The Peter G. Peterson Foundation highlighted that macroeconomic feedback effects could elevate interest rates, worsening the fiscal situation.

The baseline estimate by the CBO, assuming the tax cuts expire, projects the US debt to climb to 166% by 2054 from the current 99%, which would break historical records. The Trump administration's strategy involves supply-side reforms like increased energy production, deregulation, and spending reductions to boost growth, broaden the tax base, lower inflation, and possibly support interest rate cuts by the Federal Reserve.

The administration also plans to generate revenue from tariffs, pointing to the success of Trump's previous tariffs on China in raising substantial funds without significant impacts on inflation or economic growth.