As Treasury yields jump, changes in fiscal policy come into scrutiny. By comparing the Feb 2026 to January 2025 CBO baselines, and isolating changes due to legislation, one can identify the impact on deficits and debt arising from the changes in current law.

Here’s the impact on the deficit to GDP due to OBBBA and other legislation, as scored by CBO.

Figure 1: Change in deficit-to-GDP attributable to legislative changes between Jan 2025 and Feb 2026 (blue). Data by fiscal year. Source: CBO (Feb 2026), Table 5-1.

What’s the impact on the debt-to-GDP ratio. One can approximate this by adjusting the 2026 baseline debt-to-GDP and subtracting the cumulative changes in deficit-to-GDP.

Figure 1: Baseline Debt-to-GDP (blue), and implied debt-to-GDP without OBBBA etc. (red). Data by fiscal year. Debt is Federal debt held by the public. Source: CBO (Feb 2026), Table 5-1, and author’s calculations.

I’ve not taken into account the interest payment savings that would have accrued in the absence of the OBBBA. Note that the February 2026 CBO projections were based on economic data from November, and predated any expenditures associated with the ongoing war with Iran.

Another way of viewing the current fiscal stance of the United States is that the budget deficit in FY2026 — whe npresumably the economy is near full employment levels — is 5.8% of GDP, and the primary deficit is 2.6%.

So my question is: why aren’t rates higher?