As the new, 115th Congress convenes, there are many major items requiring action. One area where some observers expressed concern that insufficient attention was paid during last year’s elections is our nation’s long-term deficits and debt.
In the season where we just experienced the joys of giving and receiving it is worth remembering that, when it comes to our government, nothing comes for free. And if the status quo in Washington remains, we will be leaving a giant lump of fiscal coal in the stockings of future generations.
According to the non-partisan Congressional Budget Office (CBO), the federal budget deficit (the shortfall of revenue versus outlays for a given fiscal year) totaled $587 billion for FY 2016, $148 billion more than the deficit in FY 2015. This represented an increase from 2.5 percent of GDP in 2015 to 3.2 percent in 2016.
In terms of publicly held debt, CBO reports that increasing deficits over the coming decade will drive our levels of publicly held debt from $14 trillion, or 77 percent of GDP today; to $23 trillion, or 86% of GDP, by 2026.
Furthermore, to quote CBO: “Beyond the 10-year period, if current laws remained in place, the pressures that contributed to rising deficits during the baseline period would accelerate and push up debt even more sharply. Three decades from now, for instance, debt held by the public is projected to be about twice as high, relative to GDP, as it is this year—which would be higher than the United States has ever recorded.”
Why should we worry about 30 years from now? Because the choices that will have to be made and the priorities that will need to be set will only become more challenging, and drastic, as time goes by and our debt load approaches historic levels.
Yet, regrettably, Congress has largely remained on autopilot with respect to its most fundamental responsibilities of the “power of the purse.”
To quote the Committee for a Responsible Budget: “Last year (2015) was the first time Congress had passed a budget since 2009; rather than following it and enacting its $5 trillion in deficit reduction, Congress added $1 trillion more to the national debt.”
In December, Congress passed a “continuing resolution” which, as the name implies, continues to fund the government through April 28, 2017. This is a good thing to the extent that it enables the federal government to remain operational; it is a bad thing because it signals that Congress failed, once again, to enact its annual, individual spending bills through the normal legislative process.
The result is a one-sized-fits-all approach which means that, in reality, government spending is not tailored to national priorities since those priorities remain undefined – and money is allocated in no particular relation to whether government programs are effective or not. Moreover, nothing has changed in terms of overall levels of spending. The latest resolution provides funding of $1.07 trillion, precisely the same as for the previous year. The status quo endures.
In this new year of 2017, Republicans will control the White House and both houses of Congress. This may increase the likelihood that a budget for fiscal year 2018 will be passed. Several key questions remain, however. What will that budget look like? To what extent will it impact our deficits and debt positively or negatively?
Moreover, how exactly would that budget be translated into action? This will be the real test. If a budget is voted on along strictly party lines, that would set up a potential clash between the parties on the policy and spending bills that are required to actually implement the fiscal blueprint laid out by the budget.
Why? Because, while the budget isn’t subject to the usual 60-vote threshold to overcome a filibuster in the Senate, spending bills can be filibustered – and Republicans don’t hold 60 seats in the Senate. So the question is, will any budget that is passed be a road map to solidifying America’s future? Or yet another road to nowhere?
The answer will depend on how, or if, the two parties work together to set priorities and forge responsible compromises. And they will only do so if we demand it. So, with this new year, let’s all make a resolution that we will be vocal and relentless in insisting on cooperation in Congress on both spending and revenue issues, whenever and wherever possible. Not only is it important for producing better policy that addresses our federal debt, it is essential for garnering the votes required for enactment. And that will make all the difference for the generations of Americans to come.