The Congressional Budget Office (CBO) revealed in its recent budget outlook that the U.S. national debt will reach a record high of $27 trillion by 2024—a 56 percent increase from the current level of $17.3 trillion in only 10 years. At $27 trillion, each American household’s share of the national debt will be nearly $200,000.
Debt this large harms younger Americans by virtually ensuring that they will pay higher taxes in the future to finance the nation’s past spending and growing interest costs to service the debt. The buildup of national debt is also expected to lead to weaker economic growth in the future—bad news for an economy that continues to flounder and faces a shrinking labor force.
With debt projected to grow by more than half in only 10 years, it would seem that the CBO report would be a signal to Congress to take action and rein in spending—specifically by reforming entitlement programs, the greatest contributors to spending growth.
However, it appears there will not be much debate—let alone reform—this year.
President Obama has made no mention of the fiscal challenges confronting the nation. Further, Congress appears reluctant to take action on spending and debt, as evidenced by the bipartisan movement to undo sequestration piece by piece and efforts to reverse even modest spending reductions intended to offset increased discretionary spending. The Washington Post’s Ruth Markus explains this fiscal caving in the debate over the veterans’ cost-of-living adjustment change, a lauded provision in the Ryan–Murray budget deal:
Nothing concentrates the congressional mind like a powerful interest group (veterans today, seniors tomorrow) complaining about cuts. Thus, the only debate over the change was how quickly it would be undone and whether that change would be offset by other cuts.
Because of these entrenched interests, the debt limit should remain an important tool to periodically turn lawmakers’ focus to the interests of the broader public when it comes to controlling spending and debt. As Heritage’s Grover M. Hermann Fellow, Romina Boccia, explains:
[Raising the debt limit is] a highly public affair, creating a rare opportunity for shaming Congress and the president for their fiscal profligacy…. The bill presents an important opportunity to reflect on Washington’s unsustainable spending decisions and to debate necessary course corrections to avoid a fiscal crisis in the future.
To avoid public ire over increasing the debt limit, however, Congress has resorted to suspending the debt limit for a set period of time. This hides the dollar-amount increase in the debt limit until after the borrowing has already occurred, making it more difficult to hold Members of Congress accountable for deficit spending.
In a one-minute video for The Foundry, Boccia explains the dangers of this approach and offers some sound advice: “Congress should put the budget on a path to balance before deciding how much more to borrow. And Congress [should] put an actual limit on the debt.”