Possible Budget Deal Will Add $2 Trillion to the National Debt
If President Donald Trump signs the deal into law, he will have authorized a 22 percent increase in federal discretionary spending during his first term in office.
It holds true that the only thing pretty much everyone in Congress and the White House can agree on is to spend more money.
The White House and Congress are closing in on a deal to hike spending and postpone a battle over the debt limit until July 2021—eight months after the next presidential election. The agreement includes a paltry $75 billion in budgetary offsets, Bloomberg reports. Though a final deal has not yet been reached, the plan is for Congress to pass the new budget before July 26, when lawmakers will begin a six-week summer recess.
The proposed plan will increase current spending caps by $320 billion over the next two years, with the spending hikes equally split between domestic programs and the military. Depending on the details, the budget could add as much as $2 trillion to the national debt over the next decade, according to the Committee for a Responsible Federal Budget (CRFB), a nonpartisan groups that favors balanced budgets.
[Update: Trump announced that a deal had been struck on Monday evening.
I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy - on a two-year Budget and Debt Ceiling, with no poison pills….
— Donald J. Trump (@realDonaldTrump) July 22, 2019
While Trump says Republican and Democratic leaders in the House and Senate have agreed to the budget and debt ceiling plan, Rep. Justin Amash (I–Mich.) offered a note of dissent.]
More spending. More debt. More failure of representation. This "deal" reflects our broken process. A few "leaders" dictate terms to everyone else. They don't care how bad the "deal" is for America, as long as they maintain power. They then bribe and punish others to get it done. https://t.co/v6URi8T7x6
— Justin Amash (@justinamash) July 22, 2019
In a statement, the CRFB said the budget deal "may be the worst in history," given the country's current precarious fiscal condition.
"Members of Congress should cancel their summer recess and return to the negotiating table for a better deal. If they don't, those who support this deal should hang their heads in total shame as they bolt town," says Maya MacGuineas, president of the CRFB. "This deal would amount to nothing short of fiscal sabotage."
If President Donald Trump signs the deal into law, he will have authorized a 22 percent increase in federal discretionary spending during his first term in office—having signed a March 2018 budget deal that similarly jacked up both domestic and military spending.
It's apparent at this point that there is virtually no political coalition in Washington, D.C., genuinely interested in reducing spending and bringing the national debt under control. Democrats are largely a lost cause when it comes to fiscal responsibility, while Republicans—with few exceptions—are little better, having abandoned decades of lip service to the benefits of smaller government.
We're not even a decade removed from the moment when every major Republican candidate for president said they would rejecta budget deal that included $1 in tax increases for every $10 in budget cuts. Now, the modus operandi of the GOP is to ignore the threat of what near-record debt levels will do to economic growth in the coming decades. Our Republican president says he doesn't have to worry about the coming debt crisis because he "won't be here" when it happens, and conservative talking heads that once blasted President Barack Obama for soaring levels of national debt now argue, as Rush Limbaugh did last week, that "all this talk about concern for the deficit and the budget has been bogus for as long as it's been around."
The new budget deal reportedly includes a mere $75 billion in budget cuts—only $7.5 billion per year, less than 0.2 percent of all federal spending, and only half of what the White House originally sought.
The Congressional Budget Office (CBO) projects that the federal government will spend more than $57 trillion over the next decade. In the context of a $50,000 annual household budget, that means the proposed $75 billion in offsets is roughly equivalent to cutting $75 in personal spending every year and expecting that to let you pay off several maxed out credit cards.
The Republican Study Committee, a coalition that includes most members of the House GOP caucus, has condemned the budget deal as fiscally irresponsible, and the president of the conservative Club for Growth has said the agreement will "propel our country toward bankruptcy and fiscal crisis."
But as Trump has taken over the Republican Party, the influence of those other groups has waned. And with Democrats now controlling the House, any Republican resistance to higher spending will have a blunted effect anyway.
Meanwhile, the national debt will continue to grow even without lawmakers adding to it this month. The CBO presently projects that the federal government will add another $11.6 trillion to the deficit over the next decade. By 2049, the national debt will be more than one and a half times the size of the entire U.S. economy, breaking a record set during World War II. If a recession hits, those numbers could be worse.
And yet the only thing officials in Washington can agree to do is spend more money. May our children forgive us.