As debt ceiling discussions heat up, Congress is finally putting together a package that would put a serious dent in our national fiscal crisis. And while it’s not a moment too soon, it’s also not enough on its own.
Our national debt is a major problem now with a catastrophe coming down the pipe that we can see from a mile away. As things stand right now, our total debt is set to pass $25 trillion during this year. That’s more than five times the total revenue the federal government will take in this year — meaning the federal government could not spend a single cent for the next half a decade and still be in debt.
Within a decade, the size of that debt is on track to nearly double, all the way up to $46.4 trillion. Even that number is artificially low as it assumes the expiration of the individual income tax cuts passed back in 2017 — something that hopefully will not happen.
The Limit, Save, Grow Act just passed by House Republicans would make a real difference for our fiscal situation. In total, the nonpartisan Congressional Budget Office (CBO) estimates that it would reduce deficits by $4.8 trillion over the next decade, primarily by capping the growth rate of discretionary spending to one percent over the next decade.
But while spending-addicted progressives are inclined to label this heresy of the highest order, it’s not even a “cut” — just a capping of the rate of spending. It doesn’t come close to reducing the national debt or even eliminating the deficit, instead just reducing the growth rate of the next decade’s deficit by about a quarter. Instead of Congress adding over $21 trillion to the national debt through 2033, Congress would instead add $16.9 trillion. Labeling these cuts draconian is an absurd response to the context.
And perhaps most importantly, it doesn’t do much to touch the biggest driver of spending increases — entitlement spending. Claiming Social Security and Medicare are “untouchable” might be good politics, but it’s hard to justify policy-wise.
By 2033, those mandatory spending programs combined with the cost of paying interest on the debt are set to amount to 100 percent of total revenues. That means that every other function of the federal government will be funded through more deficits, which in turn makes paying interest on the debt more expensive. It’s a downward fiscal spiral that ends only at the bottom of the drain.
The further out one looks, the bleaker the picture gets. This year, Congress will take in about $4.8 trillion. Three decades from now, just the cost of mandatory spending programs and interest on the debt alone are set to cost an absurd $18.2 trillion. That, more than even our mind-bogglingly large current national debt, is why we have a fiscal crisis on our hands.
If that sounds bad, now think about the fact that it’s almost certainly too rosy of a picture. Congress will think of new ways to spend money it doesn’t have and recessions and national crises will necessitate targeted spending increases. That’s not factored into a budget that can’t predict the unpredictable.
All of that to say that while the Limit, Save, Grow Act would make a meaningful difference for our national debt, it’s not nearly enough. And people who are saying it cuts too much need to take a second look at the numbers — or the future generations that we’re selling out in the name of unsustainable spending now.
Andrew Wilford is a senior policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax and fiscal policy research 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.