WASHINGTON – The only bipartisan bill coming out of Congress these days is the one we're leaving to future generations to pay back.
And it's getting bigger all the time.
Proof came quietly last week, when the Trump administration released its mid-session review of the federal budget. The bottom line was that the federal deficit will top $1 trillion in fiscal 2019 – nearly double what the tax-cutting Trump administration had previously promised.
"This is a striking acknowledgement following almost two years of claims that economic growth unleashed by these policies will wipe deficits away," noted Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
The Trump administration still argues that last year's tax cuts (and maybe more to come) will unleash such economic growth that the deficit will start shrinking in the coming years, to a mere $363 billion in fiscal 2028.
Practically no other budget geek in Washington projects that. The Congressional Budget Office projects the 2028 deficit to be more than $1.5 trillion – more than four times what the Trumpsters estimate. And the nation's lonely beacons of fiscal responsibility – MacGuineas' group, the Peter G. Peterson Foundation and the Concord Coalition – all saw the Trump administration's deficit report and responded by issuing dire warnings.
How bad are things? Take a look at the chart above. It shows that public debt, as a share of the economy, is already the highest it's been since around 1950, when America was still paying off its bills from World War II and its aftermath. And it shows that public debt is projected to rise steadily for the next 30 years.
That's partly because Social Security and Medicare are both on unsustainable paths, and partly because the Trump administration and Congress have made things markedly worse in the past two years.
Republicans, of course, insisted on a tax cut that has reduced corporate tax receipts to their lowest level in 75 years.
And congressional Democrats, led by Senate Minority Leader Charles E. Schumer of New York, won $131 billion in domestic spending increases in a two-year budget deal that Trump groused about but signed. That's three times more than the domestic spending increase in a similar two-year budget deal signed a few years ago by then-President Barack Obama.
No one with any power is working to fix Social Security and Medicare, and no one is likely to tamper with the tax cuts or spending increases. In a largely stalemated Congress, the status quo is usually the easiest way out, so it's likely there will be no significant tax hikes or spending cuts to reduce the deficit anytime soon.
But Republicans aren't satisfied with the status quo. They want to cut taxes even more. They've proposed what they call "Tax Reform 2.0," largely a series of reforms aimed at giving Americans tax breaks to save for retirement and for their children's education.
That may be a noble notion, but it's also an expensive one.
"Last year’s tax legislation did major damage to our fiscal outlook — adding trillions to our national debt," said Michael A. Peterson, chairman and CEO of the Peterson Foundation. "After this irresponsible policy, it’s especially disappointing that lawmakers are looking to dig the hole even deeper."
More debt means Americans have to pay more interest on the debt. In fact, according to the Committee for a Responsible Federal Budget, American taxpayers will spend more on interest than it does on Medicaid – the federal-state health care plan for the poor – by 2021. And by 2024, we'll pay more on interest than we do for defense.
And someday, experts predict, interest payments on the debt will start to squeeze out funding for practically every other federal priority you can think of.
"It will slowly strangle us," said Henry Paulson, the Republican Treasury secretary who led the George W. Bush administration's response to the Great Recession. "It will squeeze out all sorts of things we need to do."
And that includes responding to future recessions with spending aimed at stimulating the economy.
Which is why the budget hawks at the Concord Coalition recently tweeted: "While federal deficits may be necessary to help pull the country out of recessions, it is irresponsible for the government to be running large deficits – let alone raising them – during strong economic times."
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