US government debt to top $54 trillion in next decade, CBO says

The federal government's record-high national debt is set to get even bigger, reaching a massive $54 trillion by the year 2034.

That's according to a new forecast released Wednesday from the nonpartisan Congressional Budget Office (CBO).

The CBO cited an aging population and rising federal health care costs as key reasons the national debt will soar over the next decade. U.S. national debt surpassed $34 trillion for the first time in January this year.

Higher interest rates -- which have affected consumers' finances with more expensive mortgages, auto loans and credit card rates -- are also having a big impact on the government's expenditures.

Starting next year, interest costs in relation to the overall economy will be bigger than at any point since 1940.

The CBO said it expects the Federal Reserve will start to lower interest rates in the middle of this year.

In positive news: the CBO said legislation enacted in the wake of the debt ceiling drama last year will result in a lower budget deficit than previously expected. The budget deficit refers to the difference between how much money the federal government brings in (mainly through taxes) versus how much it spends.

The CBO also said the budget deficit is smaller than expected because of a strong economy and jobs market. The agency singled out an additional 5.2 million workers who entered the labor force last year, many of them immigrants.

Still, the budget deficit is on track to grow to $1.6 trillion this year and $2.6 trillion over the next decade.

"Our debt is rising out of control, and it's time for Congress to wake up," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement to ABC News.