WASHINGTON (MarketWatch) — It’s an unflattering picture portrayed by the Congressional Budget Office — that trillion-dollar deficits will return in 10 years unless significant action is taken to rein in either entitlement or defense spending or lift taxes.

But behind this forecast is the assumption that interest rates will start rising by a fairly substantial manner.

The average interest rate on debt held by the public was a mere 1.8% last year. The CBO assumes a growing U.S. economy, and growing government spending, will take the average interest rate the government pays on its debt obligations to 3.8% in 2025.

It’s by no means a crazy assumption. The Federal Reserve expects to get short-term interest rates at least to the 3.5% to 4% level by then, though the implied market assumption for interest rates in 2025, using Eurodollar futures contracts, is 2.9%.

But it’s worth examining the possibility that maybe — for factors as varied as bank regulatory requirements to baby-boom investment demand — rates might not go up so aggressively.

Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities, says it’s an issue being discussed in Washington circles, although he did not have his own independent forecast.

Right now, rates aren’t going up at all. In spite of an economy that grew 2.4% last year and saw a big drop in unemployment, rates remain depressed, with the 10-year yield TMUBMUSD10Y, 0.701% holding well below 2%.

The CBO’s rule of thumb is that for every 1 percentage point difference between what it projects and what the government actually pays on the interest on its debt, there’s a move in the deficit of $1.7 trillion over 10 years. (Keeping rates exactly where they are now would yield savings north of around $2.3 trillion, though Van de Water says that would be an “extreme” assumption.)

Another way to say that is what the CBO forecasts as a $1.09 trillion deficit in 2025 becomes an $816 billion gap in a rate environment closer to the present one.

As a percentage of GDP, the budget deficit then becomes a more manageable 2.9%, instead of the 4% of GDP it’s forecasting now.

The CBO says that there are reasons that interest rates could be even higher than they projected. They also point out that in typical times, low rates are married with lower GDP growth — meaning that whatever savings come from less interest-rate expense is offset by worse revenues from individual and corporate taxpayers.

But that’s not the case now. In fiscal 2014, federal revenue as a percentage of GDP reached 17.5%, the highest level in seven years, despite low interest rates.