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Source: US Congressional Budget Office

The interactive debt-service table in this workbook is similar to the model that the Congressional Budget Office uses to develop baseline projections of net interest. The worksheet allows users to see how revenues and outlays that differed from those in CBO’s September 2020 baseline budget projections would increase or decrease net interest costs and thus affect deficits and debt. That change in net outlays for interest is often referred to as debt service. (A glossary of common economic and budgetary terms is available.)

The worksheet is designed to generate results that approximate those that CBO would produce when using its methods for projecting debt-service costs to incorporate changes to revenues or outlays in its baseline projections. The results generated by the worksheet do not constitute an official CBO estimate. Moreover, debt-service costs are not typically included in CBO’s official cost estimates.

In CBO’s baseline projections, which typically extend 10 years into the future, net outlays for interest are calculated by estimating the amount of debt that the Treasury would need to issue to finance government operations and the interest rates that it would pay on that debt. The interest rates underlying this interactive worksheet are those in CBO’s July 2020 economic forecast. Projections of two of those rates are reproduced here in a separate table.

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