National Debt

What About the Debt? Trump's SOTU Ignores a $20 Trillion Time Bomb

If a Republican president can't address a Republican-controlled Congress without paying lip service to the idea of cutting spending, what good are Republicans?

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Source: Congressional Budget Office

The State of the Union address is traditionally an opportunity for presidents to make outlandish promises. It's where you talk about going to Mars and bringing peace to the Middle East.

Historically, it has also been an opportunity to discuss the sorry state of America's entitlements and the unsustainable trajectory of the national debt. Like those plans for interplanetary travel and for spreading democracy at the point of a Tomahawk missile, these annual promises to address the country's debt are not meant to be taken completely seriously. Still, it's an important box to check—an indication that, yes, the president is aware of America's long-term fiscal crisis, and an acknowledgment that someone, someday, ought to do something about it.

President Donald Trump skipped that box in his first official State of the Union address. He did not once utter the words "debt" or "entitlement." The only mention of "deficit" came in reference to America's supposed "infrastructure deficit"—in other words, it came in a call for even more government spending. Trump did reference the "sequester," a colloquial name for the 2013 budget act instituting limited cuts in discretionary spending, but only long enough to call it "dangerous" and to ask for Congress to repeal it so more tax money can be shoveled into the Pentagon.

Trump had a lot to say about the tax reforms he signed into law in December. Rightly so. Cutting corporate and personal income taxes will let Americans keep more of their own money and will likely boost the economy in 2018 and beyond.

But the tax bill will also add an estimated $1.5 trillion to the national debt over the next 10 years. Republicans can pat themselves on the back for cutting taxes, but unless spending is reduced all they've really done is postpone the payment of taxes for 10 years or so.

In the short term, Congress has to pass a budget that isn't wildly out of whack. While the Congressional Budget Office says the deficit for the current fiscal year is only about $666 billiononly, as if a figure twice the size of Canada's annual budget is nothing—it's going to begin growing next year. The Committee for a Responsible Federal Budget projects that the country could face a trillion-dollar deficit in the next fiscal year, with annual deficits of $2 trillion expected by the mid-2020s. That's madness.

In the long term, the largest driver of the national debt are entitlement programs that run on autopilot, without needing to be renegotiated as part of each new congressional budget. In fiscal year 2016, $2.47 trillion of the federal government's $3.66 trillion in non-interest expenses—in other words, 67 percent of every dollar spent that wasn't going to payments on the national debt—went toward "mandatory spending" on Social Security, Medicare, and Medicaid. Within a decade, those three programs will consume $4.14 trillion annually, according to the Congressional Budget Office.

Congress, meanwhile, can hardly scrape together the votes for a months-long continuing resolution. Even with full Republican control, passing an actual budget—a budget that would affect only that other 33 percent of federal spending—seems like an impossible dream. Tackling entitlement costs will be an even bigger fight.

Trump's refusal to acknowledge the debt last night was on-brand for him. During the campaign, he rarely talked about entitlements except to make promises about saving Social Security. He meant that he would protect the national pension program from cuts, but anyone serious about "saving" America's entitlement programs should recognize that insolvency is a bigger threat.

And that's true not only for entitlements, but for the entire economy.

"Large and growing federal debt over the coming decades would hurt the economy and constrain future budget policy," the Congressional Budget Office warned in March of last year. "The amount of debt that is projected…would reduce national saving and income in the long term; increase the government's interest costs, putting more pressure on the rest of the budget; limit lawmakers' ability to respond to unforeseen events; and increase the likelihood of a fiscal crisis."

So a Republican president, speaking before a Republican-controlled Congress, in a year when the national debt surpassed the symbolically important threshold of $20 trillion, failed to pay even lip service to the country's fiscal imbalance.

No, those pledges from previous POTUSes didn't do much to fix the problem. But if the president isn't willing to toss in entitlement reform or deficit reduction among the other pie-in-the-sky proposals in his State of the Union address, where do they rank on his list of priorities? Are they there at all?

Trump devoted about 500 words in his speech to the threat posed by North Korea. A far more threatening bomb continues to tick away right under his nose.

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NEXT: Gitmo to Stay Open, Stormy Daniels Denies Trump Affair, Reason Reacts to SOTU Speech: A.M. Links

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  1. Reason focuses on the spending w/o mentioning the taxation that enabled the spending. Look at the WWII spike that precipitated the enormous growth in spending. What changed in WWII? Income tax withholding changed, and resulted in the enormous growth of the federal government.
    The libertarian/conservative establishment vaguely understands this, but cannot bring itself to look deeper. The income tax for the war was called a “voluntary victory tax”. Donald Duck cartoons were made to encourage workers to pay the tax. It was patriotic and cool.
    But then after the war, something changed. Instead of voluntary, the tax somehow became mandatory. Why? The Cold War! William F Buckley said we have to tax like a socialist country to defeat socialism.
    But only TAX HONESTY seems to comprehend that the withholding laws themselves were never changed. The only entities that are authorized by law to withhold are still government agencies. America was taxed by deception to support the new National Security State. Later, the Dems used this new un-authorized tax to build the welfare state.
    A libertarian near Detroit has figured out how to use the IRS own forms to get full refunds of state and federal withholdings by using the IRS own forms to point this out to them-but the lib establishment won’t cover it! See http://www.losthorizons.com

    1. Look at the WWII spike that precipitated the enormous growth in spending.

      (lol) You forgot something.

      What changed in WWII? Income tax withholding changed, and resulted in the enormous growth of the federal government

      You “forgot” that spending was cut by more than half, immediately after the war … while keeping the withholding tax! (gasp)

      the lib establishment won’t cover it!

      You website would scare the crap out of any informed person, right, left or libertarian.

      1. Hey look, fake Hihn shows up right when PB is in the middle of a manic episode.

        1. And I was born m Kenya!
          Because the earth is flat!!!

    2. In modern government, tax revenues don’t even begin to be a constraint on spending. The federal government is currently spending more than four dollars for every three it takes in as revenue.

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  2. No Congress, going forward, will ever have the guts to balance the budget. The deficit will keep getting larger until the country dies.

    1. Pretty much this. Both sides love spending shit tons of money, and eventually they will run out of other people’s money to either steal or devalue.

      The resistance against any and all attempts at cutting spending, or even keeping spending where it is, is pretty amazing.

      The only spending anyone wants to cut is that spending going on over there that isn’t a special interest of ours right over here. That’s…not sustainable.

      1. Or, alternatively, a few people are upset now that both parties give zero shits about the debt. It seems an odd choice to call out Republicans for taking the same position that Democrats have had for decades. Is it worse to have loved and lost than never to have loved at all?

  3. The real reason for the massive explosion of the national debt over the last ten years (which Reason mostly ignores) is that when Block Insane Yomomma and the democrats controlled everything in early ’09, they jacked up the spending baseline by close to a trillion dollars, and then they effectively locked it in permanently by refusing to pass a real budget ever since then.

      1. Liar? Or raging insane. Bush did far more fiscal damage … all of it blamed on Obama. A GOP fuckup of monumental proportions (likely to be exceeded by the current users.

        Over 20% of the personal income tax, $318 billion (in 2016 and rising forever) subsidizes Medicare losses … instead of the Trust Fund, which would otherwise already be bankrupt. And it’s guaranteed to get worse. Nearly half of ALL Medicare spending (45%) may now be taken from General Revenues. Medicare is increasing faster than the economy, so will take an ever-increasing share of General Revenues … forever .. debt created under Dubya.

        That’s how they “paid for” Medicare Prescriptions. They needed Democrat votes and got their ass kicked (again). The subsidy is more than twice the spending on Prescriptions — what the Dems extracted, as REPUBLICANS are still bailing out the Trust Fund!

        Technically, it was both parties conspiring again,. The middle-class barely pays the income tax, but pays most of FICA. So we now have the rich subsidizing Medicare ALSO. Just as both parties fucked us in 1986.

        1. Butt is a liar. Its also raging insane.

          It thinks socialism is great.

          Good luck with that.

    1. To prove Mikey is a liar here is a chart of federal spending:

      http://www.taxpolicycenter.org…..ay-summary

      It was $3.54 trillion when Obama came into office and actually FELL a bit lower by 2014.

      1. Palin’s Buttplug fucked up AGAIN! (sneer)

        To prove Mikey is a liar here is a chart of federal spending:

        That wan’t Mikey, dumbfuck.

        Mikey agreed with you! But with FACTS instead of mere name-calling. … and has been stating the same dumbfuck–Bush facts for several years.

        Mikey’s ONLY comment, to date, was AFTER your blunder. (OMFG)

        (My tone and boldface in response to one goddamn stoopid aggression)

        1. DD is Mikey, Hihn.

          He changed his screen ID last year.

          1. LAME (snort)
            Severe denial is a mental condition

            1. This is nothing to be proud of but I obviously know the posters here better than you do.

            2. Domestic Dissident is formerly Mike M a notoriously racist and gullible Trump fool.

              Any confusion with MICHAEL HIHN is entirely accidental.

              1. Way to deflect who you are Butt.

                You cannot hide your socialist ways.

              2. Watching PB and Hihn fight is like…breaking the 4th wall or something.

      2. The president doesn’t set federal spending- Congress does.

        By 2010, it was a Republican Congress. That mid-term election was the largest loss of seats to a party since 1938.In other words, Republicans cut the federal spending a tiny bit, not Obama.

        1. How much of Obama’s debt was created by Republicans? The bullshit way they “paid for” Medicare Prescriptions?

          https://reason.com/blog/2018/01…..nt_7114901

          Left – Right = Zero

          1. Either Presidents deserve credit for US debt or they don’t.

            Presidents sign the budgets and debt ceiling bills, so they deserve ridicule for increasing the debt just like Congress does.

            Democrats just increased the debt more than Republicans. Increasing the debt is bad. Lefties just act like Obama is some god and did nothing wrong and he did. W. Bush was horrible too.

            Obama, W Bush, Clinton, LBJ, JFK, Carter, and FDR are bad presidents and deserve their low position compared to the best presidents.

              1. Just like an idiot to say something like that.

                Your leftist ways are so easy to show to be false.

        2. What about the 2010 decline in spending?

  4. Since when do Con Men talk about paying their dupes back?

    1. or their bets?

  5. We are in this situation because the majority of the electorate does not care about debt or deficit enough to give up the benefits they receive. In fact, they are looking for ever more benefits. Except in some rather small enclaves they do not even want to hear a rumor of being told “no”, and the ones that do are reviled and called crazy. The politicians reflect what the voters want, by and large.

  6. If it took Trump *not* lying about caring about the debt for you to realize Republicans don’t really care about it, thou haven’t been paying attention.

  7. I’d say that by not talking about the debt Trump was just being honest while all former presidents just talked about it to feel good but never did anything anyway so why waste his time talking about it.

  8. When Obama took office on Jan. 20, 2009, public debt totaled $10,626,877,048,913. On Jan. 20, 2017, when Obama left office, outstanding public debt totaled $19,944,429,217,106, an increase of roughly $9.3 trillion. Or roughly $1.16T per year for Obama.

    The US debt is currently $20,620,462,000. Trump’s first year added $676,033,000 in debt.

    Hopefully we can get debt growth to $0 but the numbers speak for themselves.

  9. “what good are Republican’s”

    Keeps SNL writers employed?

  10. Unless I missed a few … this is the 3,592nd piece of hysterical whining about the debt and/or entitlements … with no clue what ti do about them … from the entire libertarian establishment (Cato/Reason/Mercatus)

    Might this be why the libertarian label is rejected by 91% of libertarians?

    Cato survey, conducted by a top pollster:

    59% of respondents would self-identify as “fiscally conservative and socially liberal.” Cato’s definition of libertarian. I call them Nolan libertarians. The second result is still on their website, but ignored. In marketing terns, does the Brand enhance of detract from the product? When those same Nolan libertarians were asked if they’d label themselves as libertarian.

    “In our Zogby survey we found that only 9 percent of voters with libertarian views identify themselves that way.” -David Boaz and David Kirby (do a page search for the words)

    Because: Always be pro-liberty, never anti-government.
    (Like when we had policy solutions)

  11. Fuck you, cut spending.

      1. Pull out of Afghanistan, Syria, and Iraq, you know, shit hole countries. Oh and cut all foreign aid in half, with a full cut to all countries in the Middle East. Then cut 20% of all flag officers in the military, 5% cut to our nuclear force, and 50% cut to the Dept. of Education, 25% cut to the Dept of Interior, EPA, Commerce. That should be a good start.

        Let me know when you have any actual suggestions besides just belly aching.

  12. The National Debt amounts to nothing. Nothing at all. There are two sets of rules for people living in all civilized nations – one set of rules governs the masses the other set of rules allows our masters to do whatever is necessary to retain their power, prestige and privileges. Financial debt for the masses exists in reality. Financial debt for the State (and those that control it) is illusory. Consider the “2008 financial crisis” and how the issue was resolved. The major banks / lending institutions all became insolvent when the bubble burst. Had those banks “too big too fail” failed the power elite would have been bankrupt and the master class could not allow that to happen so the Federal Reserve absorbed some $14.7 billion dollars of bad debt from the too big banks and placed said debt on the imaginary books then lent the same sorry institutions trainloads of cash at near zero interest rates to re-establish their control of the financial system. This is what will happen with the National Debt as well. When the ND reaches some astronomical number, the Federal Reserve will absorb the government debt onto their books and presto! new treasury bonds and bills will be issued. The National Debt is meaningless.

    1. Mostly untrue.

      The Fed HAS made trillions in loans – almost all to the Treasury Department. Big banks repaid every penny they borrowed.

      And $14.7 billion is chicken scratch anyway.

      1. To a lefty $14.7B is chicken scratch. It’s taxpayer money after all and the left loves to spend other people’s money. RINOs do too.

      2. Big banks repaid every penny they borrowed.

        You are completely missing what those loans were. The Fed/govt/banks all decided to rig the roulette wheel in favor of themselves – they get a loan to make their bets – they won at the expense of everyone else – they then paid back the loan and privatize the winnings

        $14.7 billion is chicken scratch anyway.

        It ain’t 14.7 billion. The Fed balance sheet has grown from $850 billion to $4.5 trillion. That’s $3.7 trillion of loans – just directly from the Fed on their balance sheet. And most of that crap – roughly $3.5 trillion via BOJ, $2.5 trillion via ECB, $2 trillion via China – only BoE hasn’t played that game – has taken place on other central banks balance sheets. Not to mention, the leverage that is enabled on ‘private sector balance sheets’ when they have a ‘free money spigot’ – and all of that leverage serves to jack up asset prices for the haves at the direct expense of the have-nots. And golly none of that even counts as ‘inflation’ – so they can even subsidize interest costs – at the direct expense of savers.

      3. Correction: The Federal Reserve absorbed $14.7 TRILLION (not billion) onto their “books” in 2008. My mistake. And, yes, the Fed will do the same slight of hand when the US National Debt reaches some astronomical number. Just wait and see ….

    2. Do you really think the U.S. is the first country to come up with the idea that artificially creating more money out of thin air can solve any problem?

      Dude, fools all over the world have believed this bullshit for hundreds, if not thousands, of years. “This time is different”, “Now we REALLY know what we’re doing”, blah blah blah.

  13. This is not surprising. It is quite strategic to not mention the debt. It is too soon after the tax cuts. Wait a little while and the GOP will cry about the debt in order to rationalize cutting social spending. Americans are stupid and will gladly forget the tax cuts for wealthy people and they will readily agree that we must cut spending (except for military). This is, sadly, very predictable.

    1. People can already see the good results of tax cuts for most Americans and they will vote accordingly in 2018.

  14. I would like to see a president (or have heard Trump last night) promise to cut spending in all of the departments with executive oversight/control. Just because money is budgeted doesn’t mean that it needs to be spent. Corporate America learned this lesson; Trump knows this lesson.

    What Trump should have said is that even though Congress refuses to act and pass a budget with discretionary spending cuts, he is instructing all of his departments to cut spending by 5% this year, and that he’ll evaluate additional cuts for subsequent years. Send that 5% back to the treasury.

    It won’t solve the debt crisis, which is largely driven by entitlements, but it certainly sets a good example of how to run a business or government.

    1. Oh, and promise to veto any bill that raises spending.

    2. Just because money is budgeted doesn’t mean that it needs to be spent

      Cheney tried that with the V-22 when he was SECDEF and the Supreme Court smacked him down. Money allocated by Congress most certainly needs to be spent.

  15. What good are Rs? They are half of the political fraud that promises popular change. They polarize and play the fractions off, one against another, using fear, promises, and misdirection. But the populace doesn’t have a clue about what is needed anyway, so even if they were actually in charge, nothing productive would follow.

    This is the same show we’ve seen for over a century, the lying extortionists leading the willfully blind victims.

    And this is the pathetic excuse for “law & order” that the public salutes, worships, unconditionally supports, and dies for. Welcome to the dying U.S. Empire, same as all the other empires, no unique principles, no moral superiority.

    1. “And the parting on the left, is now parting on the right… Meet the new boss, the same as the old boss.”

  16. Its deficit reduction by a piece meal domino effect.
    Deport ALL of the illegals in a slow medical manner, which opens up job opportunities for the currently unemployed US citizens. it also tightens the workforce labor numbers. Tight labor numbers requiress employers to raise wage offers or suffer either loss of production abilities or loss of food crops.
    Fewer unemployed means less government subsidy payouts. In addition higher market wages increases federal tax collections as well as increase individual spending capabilities which in turn increases product demand.
    A healthy economy is when there is very tight labor work force. Who hates a tight labor workforce? Employers and want high competition, so wages can be negotiated downward.
    Its best if the government only got involved in the service of providing unemployed applicants for an employer on a nationwide service system. it’s imperative to keep a tight work force at all times.

  17. Booooorrrrriiiinnngggggg

    Debt? *snooze*

  18. Ahem.

    “No, fuck you, cut spending.”

  19. Jeez, the finger-pointing gets old ….

    Want to assign “blame” where it belongs?

    The people who vote have no interest – zero, zilch, nada – in dealing with deficits or the national debt, not if it’s going to require a reduction in their goodies or an increase in their taxes.

    They support raising someone else’s taxes and cutting someone else’s benefits – and that’s where it ends.

    Every “benefits” program is sacrosanct because the constituency for it continuing is smaller and much more motivated to scream bloody murder if anyone proposes “touching it” than any taxpayer who might theoretically benefit if it was cut.

    The ONLY way deficits get addressed is if & when there’s a train wreck which makes the harm done by continuing the current idiocy just as damaging “in the real world” as the client class believes cutting their benefits would be.

    Until then – until that train wreck occurs – what we have is what we’re stuck with.

    So carping at any politician who doesn’t stick his hand into the wood-chipper of “deficits” is really a fools errand.

    And, for this particular President (for whom I didn’t vote … didn’t vote for his opponent either), saying ANYTHING which might turn off anyone who might be inclined to support him otherwise is foolish.

  20. Jeez, the finger-pointing gets old ….

    Want to assign “blame” where it belongs?

    The people who vote have no interest – zero, zilch, nada – in dealing with deficits or the national debt, not if it’s going to require a reduction in their goodies or an increase in their taxes.

    They support raising someone else’s taxes and cutting someone else’s benefits – and that’s where it ends.

    Every “benefits” program is sacrosanct because the constituency for it continuing is smaller and much more motivated to scream bloody murder if anyone proposes “touching it” than any taxpayer who might theoretically benefit if it was cut.

    The ONLY way deficits get addressed is if & when there’s a train wreck which makes the harm done by continuing the current idiocy just as damaging “in the real world” as the client class believes cutting their benefits would be.

    Until then – until that train wreck occurs – what we have is what we’re stuck with.

    So carping at any politician who doesn’t stick his hand into the wood-chipper of “deficits” is really a fools errand.

    And, for this particular President (for whom I didn’t vote … didn’t vote for his opponent either), saying ANYTHING which might turn off anyone who might be inclined to support him otherwise is foolish.

  21. Jeez, the finger-pointing gets old ….

    Want to assign “blame” where it belongs?

    The people who vote have no interest – zero, zilch, nada – in dealing with deficits or the national debt, not if it’s going to require a reduction in their goodies or an increase in their taxes.

    They support raising someone else’s taxes and cutting someone else’s benefits – and that’s where it ends.

    Every “benefits” program is sacrosanct because the constituency for it continuing is smaller and much more motivated to scream bloody murder if anyone proposes “touching it” than any taxpayer who might theoretically benefit if it was cut.

    The ONLY way deficits get addressed is if & when there’s a train wreck which makes the harm done by continuing the current idiocy just as damaging “in the real world” as the client class believes cutting their benefits would be.

    Until then – until that train wreck occurs – what we have is what we’re stuck with.

    So carping at any politician who doesn’t stick his hand into the wood-chipper of “deficits” is really a fools errand.

    And, for this particular President (for whom I didn’t vote … didn’t vote for his opponent either), saying ANYTHING which might turn off anyone who might be inclined to support him otherwise is foolish.

  22. Bah….who cares about the national deficit? After all, it’s only money we owe to ourselves. Run that bitch up…

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