There should be a corollary to the old maxim that death and taxes are the only certainties in life: You can be pretty sure that Washington won’t spend your taxes responsibly.
As Congress scrambles to craft yet another deal to avoid defaulting on the debt, talk of long-term reform remains conspicuously absent from the debate. Instead, discussions remain focused on how to raise the debt ceiling for the 25th time since 1993. In other words, Congress is yet again looking to postpone the consequences of its lack of fiscal discipline, while at the same time making no effort to change its behavior. And with the national debt hitting $22 trillion back in February and moving rapidly towards $23 trillion, that lack of responsibility is becoming more and more costly.
The last time Congress made any positive steps toward addressing its overspending problem was 2011, when it passed the Budget Control Act (BCA). The BCA put in place caps on discretionary spending, enforced by automatic across-the-board cuts (sequestration) if Congress failed to limit itself.
Unfortunately, the positive impact of the BCA only lasted a handful of years. After the restraints kicked in for a few years, Congress began to make deal after deal to circumvent these restrictions while either raising or suspending the debt limit. Just last year, the Bipartisan Budget Act “temporarily” raised the spending limits enforced under the BCA, a move that the National Taxpayers Union Foundation estimated would cost taxpayers $12 trillion over the next decade.
And here’s the truly scary thing for taxpayers: addressing discretionary spending is the politically easy part. What will be even more difficult is having an honest conversation with voters and taxpayers about how entitlements like Social Security and Medicare are insolvent — these two programs alone are estimated to run an $82 trillion deficit over the next 30 years. If Congress can’t be adult about spending within its means when it comes to defense spending and other discretionary programs, how can it hope to approach serious reform to politically popular entitlements?
Soaring debt figures affect more than just D.C. budget-keepers. Rising debt curtails economic growth, as one World Bank study estimates that going above a 77 percent debt-to-GDP ratio has significant negative effects on economic growth. The United States is currently right at that tipping point, but the CBO predicts that the debt as a percentage of GDP is on pace to roughly double to 152 percent by 2048 (and that’s assuming Congress doesn’t come up with new programs or boondoggles, an almost painfully optimistic assumption).
Based on the study’s estimates, the growth rate of the economy will shrink by 1.28 percent by 2048 — 1.28 percent less than the meager 1-2 percent growth rates Americans experienced under the Obama Administration. Even last year, a strong one by recent standards, the country only experienced 2.9 percent GDP growth. In other words, the debt will soon become a millstone dragging down economic growth.
And that’s not the only way that skyrocketing debt will hurt Americans. As debt increases, so too does the cost of paying interest on the debt. Interest payments on the debt are set to triple and blow past $1 trillion annually by 2029, representing a huge and growing chunk of federal spending that provides no real benefit to taxpayers. That’s a staggering amount of money, given that the entire Department of Defense “only” costs around $700 billion today.
Congress needs to get serious about reforming its spending habits before this scenario plays itself out — or worse, before it aggravates the situation further by continuing to create new programs to spend money on. Taxpayers deserve serious reform proposals, not more kicking the can down the road.
Andrew Wilford (@PolicyWilford) is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to fiscal policy analysis and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.