MENU

Reason.com

Free Minds & Free Markets

Congress Is Still Ignoring Its Spending Problem as Deadline Looms for $1.3 Trillion Spending Bill

Four out of five voters agree that Washington has a spending problem, but a new omnibus spending bill will add yet more to the national debt.

Alex Edelman - CNP/NewscomAlex Edelman - CNP/NewscomCongressional leaders hope to vote on a new spending bill by the end of Thursday, a day before the deadline to avoid another government shutdown.

The $1.3 trillion* bill will fund the federal government through the end of the current fiscal year on September 30. According to reports from Politico, CNBC, and other outlets, big ticket items still being negotiated include how much to spend on President Donald Trump's border-wall pet project, how much to spend on a new train tunnel linking New Jersey with New York City, and whether to include protections for immigrants who came to America illegally as children.

You know what's almost entirely absent from the discussion? Any concern for America's long-term fiscal health.

To be fair, the right time to have that discussion was probably earlier this year, before Congress passed the budget deal that paved the way for this bill. The omnibus package set to pass this week fills in specific line items, while the budget outlines spending priorities in broad strokes. But instead of addressing any deeper fiscal issues, lawmakers voted to raise spending caps and add to the national debt.

The current budget plan will add an estimated $1.7 trillion to the federal debt in the next decade, and it will cause the Treasury to run a trillion-dollar deficit every year for the foreseeable future, according to a nonpartisan analysis from the Committee for a Responsible Federal Budget. Because tax cuts passed late last year reduced future government revenues, higher spending in coming years will have a dramatic effect on America's national debt. The committee projects that annual interest spending on the national debt will rise from $263 billion in 2017 to $965 billion by 2028.

Not everyone in the government is ignoring the problem. David Malpass, the Treasury Department's undersecretary for international affairs, told Fox Business last month that he's increasingly troubled by huge budget deficits. "I think it is too high now, and it's going higher," he said of the national debt.

It's going higher, in part, because of quick succession with which Republicans approved tax cuts and massive spending increases, a combination that undercut an argument Republicans have used for years to push for lower taxes. Only by cutting government revenue could spending be brought under control, the argument went. That logic seems to have misunderstood just how disconnected revenue has become from spending—even among Republican officials who spent a good portion of the past decade talking about the need for fiscal restraint.

"It turns out that tax cuts did not starve the beast," writes Brian Riedl, a senior fellow at the Manhattan Institute. "The beast simply grabbed a plate of deficit-finance and continued eating."

If cutting taxes can't bring spending under control, the last, best hope lies with voters. A February poll from Rasmussen Reports found that 77 percent of likely voters think politicians' unwillingness to cut spending is more to blame for the budget deficit than taxpayers' unwillingness to pay more in taxes. Voters also say they want Congress to balance the budget, Rasmussen reports, but they generally believe that won't happen.

The usual caveats apply here. First, it's not surprising that a poll of voters found that voters think politicians are the problem. A poll of politicians would probably show that they think voters' unwillingness to pay more in taxes is a larger part of the problem. Second, voters in aggregate usually agree that they want to pay less in taxes and see the government spend less—but it's difficult to get a consensus on what, exactly, should be cut.

Foreign aid usually polls well as a target for spending cuts, but it accounts for a teeny, tiny share of federal spending. If you're serious about getting the federal deficit under control, you need serious cuts to the Pentagon and to entitlements—and election after election shows that, given the choice, voters tend to back candidates who promise to increase spending in those areas while railing against proposed cuts.

Indeed, the federal government could eliminate all spending except entitlement programs and the interest on the federal debt, and the budget still would not be balanced.

If voters call for bringing deficits under control and for cutting spending—not only in surveys, but at the ballot box—there's perhaps some small hope that the trend of higher spending and more borrowing can be reversed. In the meantime, Congress appears ready to gorge itself with massive spending increases that will drive the national debt to new highs.

CORRECTION: This post erroneously described the omnibus bill as spending $1.3 billion. It will spend $1.3 trillion.

Photo Credit: Alex Edelman - CNP/Newscom

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Fist of Etiquette||

    Four out of five voters agree that Washington has a spending problem...

    And four out of those four agree that it's the other four whose programs should be cut.

  • BestUsedCarSales||

    They need to ask people what should be cut instead of asking if the debt is a problem. Or ask them what should be done. Though my guess is many will just say tax rich people more.

  • BYODB||

    Damn you, but I should know better by now.

  • Fist of Etiquette||

    Yes.

  • Elias Fakaname||

    Federal funding for PSA's should be cut 100%. Also, we could eliminate the debt. Of energy, and redistribute it's nuclear regulatory functions to the military or similar body. D. Of Ed. Can also go bye bye. Also, how about that massive fraud I always hear about related to Medicare and Medicaid. Maybe start gutting the areas getting fleeced there too. That's just off the top of my head.

    Get some accountants together and start goIn through the broad strokes in the federal budget. I'm sure there are some real gems that can be carved out without any real pain. I'm sure I could gut the budget by an easy ten percent within a fiscal year or so (none of that ten years projection crap.) without pushing grand,a over the cliff or starving any orphans to death. Probably a lot more.

  • BYODB||


    Four out of five voters agree that Washington has a spending problem, but a new omnibus spending bill will add yet more to the national debt because everyone thought someone elses bennies should be taken away instead of agreeing to cut their own.


    FTFY

  • NotAnotherSkippy||

    Yup.

  • Citizen X - #6||

    Congress Is Still Ignoring Its Spending Problem as Deadline Looms for $1.3 Trillion Spending Bill

    Funny, they don't look like they have any problem at all with all that spending.

  • BestUsedCarSales||

    They're starting to get really good at it it seems.

  • Palin's Buttplug||

    Because tax cuts passed late last year reduced future government revenues, higher spending in coming years will have a dramatic effect on America's national debt. The committee projects that annual interest spending on the national debt will rise from $263 billion in 2017 to $965 billion by 2028.

    And when taxes are hiked in the future the GOP fan-boys here will yell SOCIALISM!

  • BYODB||

    God forbid we keep more of our money to invest as we wish. We should give it all to the government that hasn't bothered to even pretend the budget is balanced in at least twenty years but more realistically within living memory.

  • Elias Fakaname||

    Two things. First, it partially depends on how much the pie grows in that time. Second, just cut spending. Read my above post on some specifics. Do you see ANY of that as a problem?

  • NotAnotherSkippy||

    If you're serious about getting the federal deficit under control, you need serious cuts to the Pentagon and to entitlements

    No, you need serious cuts to entitlements, full stop. You quoted Riedl. Why not quote some more of his work?

    On the spending side, slashing the defense budget to European levels would close just one-seventh of the gap. Cutting waste and foreign aid can close only a small percentage of it.

    In reality, balancing the long-term budget without reforming Social Security and Medicare (and fast-growing Medicaid) would require either nearly doubling income-tax rates across the board or eliminating nearly every remaining federal function.

    it's the entitlements, stupid.

  • Palin's Buttplug||

    Lets say you are Trump and you have conned your rubes into thinking they can have everything. Would you cut entitlement spending?

  • NotAnotherSkippy||

    You mean like Bernie and Warren?

  • Unicorn Abattoir||

    Lets say you are ObamaTrump and you have conned your rubes into thinking they can have everything. Would you cut entitlement spending?

    Well, at least we know the answer to that.

  • Palin's Buttplug||

    Obama supported the entitlement cuts in Simpson Bowles.

  • BYODB||

    Yet even then it didn't balance, so what's your point?

  • NotAnotherSkippy||

    Obama rejected Simpson Bowles. We've been over this.

  • Palin's Buttplug||

    Wrong, nor does your link support that claim.

    In his most recent proposal to resolve the fiscal showdown and reduce the budget deficit, President Barack Obama offers approximately 90 percent of the overall amount of spending cuts proposed in the bipartisan deficit reduction plan authored in 2010 by former Sen. Alan Simpson (R-WY) and former White House Chief of Staff Erskine Bowles—the co-chairs of the president's 2010 fiscal commission. The proposed revenue increases in the president's offer are about 60 percent of those proposed by Simpson-Bowles.

    With this proposal, President Obama is clearly trying to find a reasonable middle ground that both Republicans and Democrats can agree on. Given how often conservatives cite the Simpson-Bowles plan as a model of bipartisan compromise, only the most ideologically blinded lawmakers could reject a plan that has 90 percent of Simpson-Bowles spending cuts and 60 percent of the plan's revenue for having too much revenue.

    CAP

  • Sir Chips Alot||

    so he did reject it. Thanks for confirming. From the link:

    Federal debt is currently $16 trillion. Under Obama's budget, it would increase to $26 trillion over 10 years.

  • Migrant Log Chipper||

    Sure he did and he worked REAL hard on restraining spending. You're fucking dumber than I realized.

  • jcw||

    Indeed, the federal government could eliminate all spending except entitlement programs and the interest on the federal debt, and the budget still would not be balanced.

    Quote from the article that you just read. I guess they should have said it more times to satisfy you?

  • jcw||

    Indeed, the federal government could eliminate all spending except entitlement programs and the interest on the federal debt, and the budget still would not be balanced.

    Quote from the article that you just read. I guess they should have said it more times to satisfy you?

  • NotAnotherSkippy||

    Fair enough, I missed that. Can you then reconcile the logic that says we have to cut defense spending when it mathematically cannot solve the problem?

  • CE||

    Because it's being spent on nonproductive stuff?

  • BYODB||

    Arguably military spending is spending on R&D and actual hardware, something that is literally more productive than paying people to consume. Period.

  • marshaul||

    military spending is spending on R&D and actual hardware, something that is literally more productive than paying people to consume

    No. Spending in the absence of spontaneous market demand is ipso facto and axiomatically not productive.

    Military spending may, to a point, be necessary, but it is still value-destroying. And when it is beyond necessity then it is, in net, value-subtracting.

    We spend more than necessary, therefore we are achieving a net reduction in productivity. QED.

  • livelikearefugee||

    You could also say that government spending misdirects capital away from more productive uses.

    What's the proof the they are more productive? Because people voluntarily spend/invest their money on them.

    No one voluntarily engages with government. We must be coerced to spend our money there because the exchange is disadvantageous to us.

  • NotAnotherSkippy||

    So it has nothing to do with fiscal responsibility then. And that's the answer I expected.

  • BYODB||

    Reason, as a publication, is incapable of being even ballpark honest about this subject even while occasionally one of their writers lets some truth accidentally slip through the cracks in their facade of an argument.

  • NotAnotherSkippy||

    Remember, starve the beast doesn't work when it comes to deficit, but it DOES work with military adventurism.

  • BYODB||

    Libertarians are so shit at foreign policy that it causes them to literally punch themselves in the face when it comes to issues they claim to be excellent on, which seems to be par for the course.

  • Sir Chips Alot||

    Yeah, not invading sovereign countries is so shitty. How could a country not do that?

  • livelikearefugee||

    I'm punching my face right now because of all the countries we haven't invaded, yet.

  • AlmightyJB||

    Both entitlements and military spending should be cut. Drastically.

  • livelikearefugee||

    Milton Friedman pointed this out in his book and TV series almost 40 years ago.

    Sadly, it's just gotten worse. Americans are apparently hopelessly addicted to government deficit spending.

    Make America Greece Again

  • CE||

    Oh, there are ways to cut spending:

    1. Halt the COLA increases in social programs for 4 years. (Hello, AARP....)
    2. Cut the military budget by 20 percent. We're at peace.
    3. Permanently lay off all federal personnel deemed "non-essential" in any of the past several government shutdowns.
    4. Eliminate 10 percent of the federal workforce, across the board.
    5. Give remaining federal employees a 10 percent across the board pay cut.
    6. Implement a hiring freeze in all federal government departments.
    7. Transition all federal employees to 401k type plans from pensions.

  • Tony||

    This is a strange way of going about proving that deficits matter.

  • ||

    It's been clearly proven that they don't...until they do. Until then, everyone is content to just whistle away.

  • AlmightyJB||

    Yawn, what's going on with Russia?

  • Bob Armstrong||

    $450,000,000,000 debt service on $3,340,000,000,000 revenue with $832,000,000,000 deficit ?
    Half the deficit is already interest payments .
    Spending problem ?
    Ya think ?

  • Tony||

    I don't understand why Republicans keep trying to starve the beast when none of them will acquire the balls necessary to actually cut any major entitlements. That's the whole idea, right? That's the only thing that can give Paul Ryan an erection. Which part of this did they misjudge? The fact that the federal budget isn't like a household budget with no credit cards after all? Or the fact that Republican politicians lack said balls and they stupidly expected them to?

  • ||

    Notice that they don't use that phrase anymore. There's no evidence that they remotely care about the consequences of deficit spending. They're simply buying votes at this point.

  • Diane Reynolds (Paul.)||

    That's what deficit spending is. It's like an ATM for votes.

  • livelikearefugee||

    But, you're taking money from someone else's account.

  • Diane Reynolds (Paul.)||

    You keep saying "deadline".

    I don't think that word means what you think it means.

  • JeremyR||

    The sad part is, if we could just slow the increase in spending, we'd eventually be okay. But we won't even do that.

  • Migrant Log Chipper||

    Exactly, freezing spending increases would whittle deficits pretty quickly, too many votes for sale for it ti happen. These fuckers won't stop until people stop lending the government money.

  • Charles Barr||

    The way to fix the national debt problem is simple: STOP ISSUING DEBT!!! The debt and the deficit are two separate issues. Fiat money is inferior to hard money, but "unbacked" fiat money is much less destructive to the economy and to personal liberty than the "debt-backed" fiat money we use today. We urgently need to transition to a debt-free currency before the national debt overwhelms the economy. See www.fixourmoney.com .

  • Joseph Denman||

    I was looking for some working capital to help in expanding my business in regards to buying & upgrading equipment. Miles Dugan was awesome – he was straightforward & responded to any and all of my emails & phone calls promptly. The entire process was less than 48 hours & you required very little paperwork. I would highly recommend Miles Dugan Funding to others that are looking to g & expand their business. Here is Miles info you need to contact (milesduganllc@gmail.com) and be free of that stress today. Thanks alot.

    Joseph Transportation.
    Denman.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online