Are We Heading Back Toward $1 Trillion Budget Deficits?

"Finally, high debt increases the risk of a fiscal crisis in which investors would lose so much confidence in the government's ability to manage its budget that the government would be unable to borrow at affordable rates," the report states.

Despite the grim tidings, congressional Democrats seized optimistically on a smaller aspect of the report: that the federal government's subsudies for the health care exchange premiums under the Affordable Care Act will be lower than previously projected.

CBO found that because the exchange premiums themselves will cost less, the government's share of those will amount to about $1.032 trillion between 2015 and 2024—$104 billion less than previously projected.

The news comes during a time when the U.S. has made a deep dent in its deficit. The federal deficit lingered above $1 trillion from 2009 to 2012, reaching higher than $1.4 trillion in 2009 amid the recession. But the shortfall dropped to $680 billion in fiscal 2013. And CBO's latest projections Monday show the deficit continuing to drop to $492 billion this fiscal year and then to $469 billion in 2015.

CBO also notes that 2014 would be the fifth consecutive year in which the deficit has declined as a share of gross domestic product, since peaking at 9.8 percent in 2009—a year in which government spending was revved up to help stimulate the economy.

Relative to the size of the overall economy, the $492 billion deficit for fiscal 2014—at 2.8 percent of GDP—will be nearly a third less than the $680 billion shortfall in fiscal 2013, which was equal to 4.1 percent of GDP.

But after 2015, CBO says that it will start to rise and could reach $1 trillion in 2022 through 2024.

CBO's figures are known as "baseline projections," showing what would happen to the federal budget if current laws remained in place. They are designed to give Congress a benchmark against which to measure the effects of proposed spending and taxes.

"The latest budget numbers show that while we are experiencing a temporary improvement to our deficit problems, long-term debt trends remain very troubling," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt. "What's more, the numbers will likely be even worse after 2024 if we don't take action soon on tax and entitlement reform."

"The analysis makes it clear that this is no time to put new policies on the nation's credit card or use phantom savings," she added. "Instead of patting themselves on the backs for modest improvement in the near term, policymakers should be using this period of relative calm to make real progress on our long-term fiscal challenges."

Meanwhile, Senate Budget Committee Chair Patty Murray, in a statement, honed in on CBO's findings that the cost of the government subsidies tied to exchange premiums under the Affordable Care Act will fall by $104 billion over 10 years. The report also projected that 25 million people will buy insurance through those exchanges by 2017, an increase of about 1 million over its earlier projection.

"Today's CBO update shows once again that the Affordable Care Act will help reduce our deficits while offering more Americans access to quality, affordable health care," Murray said. "We need to keep building on this progress."