Congress and the President Must Get Serious about Debt Crisis
Failure to come to an agreement on a continuing resolution has led to the current government shutdown, even as another epic battle looms over another increase in debt ceiling. Unfortunately for taxpayers, whatever agreement Congress reaches, it is unlikely to get us any closer to finding a long-term solution to our fiscal problems.
Failure to come to an agreement on a continuing resolution has led to the current government shutdown, even as another epic battle looms over another increase in debt ceiling.
Unfortunately for taxpayers, whatever agreement Congress reaches, it is unlikely to get us any closer to finding a long-term solution to our fiscal problems.
In the last 30 years, the U.S. has raised the debt ceiling 32 times, including 18 times under President Ronald Reagan, four under President Bill Clinton, and seven under President George W. Bush.
Most recently, Congress raised the debt limit for the fifth time during President Obama's tenure in the White House, to $16.69 trillion, $305 billion above the previous statutory limit.
The current level is exponentially greater than when it first reached $1 trillion about 30 years ago. In other words, over-spending is a bipartisan problem.
We can expect this trend to continue and even to accelerate. The explosion of spending on Medicare, Social Security, Medicaid and Obamacare will drive the debt to unprecedented levels and require much more borrowing authority than Treasury currently has.
According to the Congressional Budget Office, U.S. debt could jump to 200 percent of GDP by 2037. In theory, this should signal to lawmakers that they have a serious spending problem that needs to be addressed immediately by reforming the main drivers of our future debt.
Sadly, when it comes to over-spending there are very few adults in Congress. For instance, this year, GOP lawmakers have mostly dropped the ball on the fight against federal spending.
In fact, many of them have clearly shifted their focus from cutting spending to restoring defense spending cuts implemented as part the so-called sequester earlier this year.
The House-passed Ryan budget, for example, would exempt defense entirely from the sequestration cuts (it claims to find “savings” elsewhere in non-defense spending).
Even the most libertarian budget in Congress, that of Sen. Rand Paul, R-Ky., reverses these cuts. And, of course, the recent debate over whether or not the U.S. should intervene in Syria has been used by some congressional Republicans to renew their efforts to repeal the sequester and jack up defense spending.
In addition, last week, House Republicans released a proposal for negotiating an increase in the debt limit that shows no real sign they’re serious about addressing the nation’s fiscal mess.
Many of the items in the proposal have nothing to do with spending levels or debt, and the list itself seems like a hodgepodge of ideas thrown together at the last minute.
While the proposal does include some fine policy ideas on the spending front, such as delaying Obamacare for a year and means-testing Medicare, alongside a short list of other health-care savings, it won’t be enough to put us back on a sustainable fiscal path.
Besides, I suspect there is a serious risk that any actual “savings” Republicans get will be used to cancel the defense cuts, and possibly the sequester in other areas as well.
A federal default has to be avoided and the debt ceiling will have to be raised. However, Republicans should use the debt-ceiling debate as an opportunity to educate the public about the country’s debt problem and explain what it would take for them to fix it.
Their half-baked proposal doesn’t do that, nor will it give them much credibility on the fiscal-responsibility front. It is time to change direction and propose a plan that goes beyond empty demands to defund Obamacare and offers real entitlement reforms (not the kind of minor “reforms” that both sides tend to favor).
Also, they should insist that the reforms be implemented immediately (even if near-term reforms are modest), not a decade from now.
As important, the savings from proposed entitlement reforms should be applied to slowing growth of entitlement spending, not to get out of the defense sequester cuts.
Neither side will get everything they ask for in such a budget deal. But that doesn't excuse either side from ignoring the most serious budget crises that loom in our future by continuing to choose gimmicks and Band-Aid policies instead of fundamental spending reforms.