By 2022, the U.S. government is projected to spend almost as much money on interest payments for its massive debt as it will on the Pentagon, more than $600 billion every year.
The spiraling expense underscores a frightening reality in Washington: President Trump and Congress have not only massively expanded the U.S. government’s debt, they have broken free of multiple guardrails intended to keep budgets balanced, freeing future lawmakers to further expand the yawning gap between what the government takes in and what it spends.
The latest increase has come at a time when Republicans control the White House and Congress, cementing a GOP indifference to balancing the budget despite making deficit reduction their rhetorical North Star during the Obama administration.
“There’s no serious effort on either the Republican or Democratic side to address it, and the president’s not for it,” Sen. Lamar Alexander (R-Tenn.) said. “So if the president’s not for it, it’s not going to happen.”
Now, this borrowing binge appears impossible to reverse, despite a growing global prosperity that has prompted leaders of other major economies to shrink deficits that expanded during the recession a decade ago. Global finance ministers are scheduled to meet this week in Washington, and some visiting officials are expected to try to isolate the United States’ debt-binge approach as a dangerous outlier.
In February, Congress passed a $1.3 trillion spending bill that shredded caps erected in 2010. It also waived the debt limit for the 15th time in the past 10 years.
In December, Republicans overrode unanimous Democratic opposition to pass a tax cut projected to add more than $1 trillion in deficit spending, as the GOP used a shell budget resolution and waived the federal law meant to prevent cuts like this from ever taking place.
During the debate, they torpedoed a provision that would have triggered an automatic tax increase if rosy economic growth projections did not materialize.
The author of that failed provision, Sen. Bob Corker (R-Tenn.), has grasped for any way to limit the tax law’s impact on the debt. Even when his idea was rejected, he voted for the tax law anyway.
Four months later, eyeing his retirement at the end of this year, Corker signaled he might have made a mistake. He said a complete antipathy has taken hold of Washington, particularly when it comes to changing costly programs such as Medicare, Medicaid and Social Security.
“I just leave here despondent over that particular issue because there’s just no forcing mechanism, there’s no punishment to Congress for not doing its job,” he said.
To be sure, Democrats and Republicans have both done more to expand the deficit than contract it, as they have found it easier to spend money than to cut it. The parties focus on short-term goals and winning elections, punting difficult decisions about the debt, military budgets or social welfare programs.
Rising interest rates could expedite this reckoning, lawmakers from both parties believe, but it is not expected to be a focus for either party heading into the November midterm elections that are shaping up to be a referendum on Trump’s governance.
On Thursday, the House of Representatives failed to advance a halfhearted amendment to the U.S. Constitution that would have required Congress to balance its budget.
“Everybody on this floor knows this is all pretend,” Rep. Jim Jordan (R-Ohio) said on the House floor during the vote.
On Wednesday, Speaker of the House Paul D. Ryan (R-Wis.), once considered by the GOP to be the pied piper of fiscal responsibility despite having championed the deficit-busting tax law, said he was retiring.
Trump, meanwhile, has paid little heed to any warnings about fiscal recklessness. He has embraced higher deficits through tax cuts, but his senior advisers have blamed the swollen spending on Congress’s inability to plan ahead. Members of Congress have blamed the White House’s unwillingness to take the lead, and House Republicans have blamed the Senate for failing to vote on their bills.
While all sides blame each other, the federal government ran deficits in excess of $200 billion in both February and March, the only time this has happened in consecutive months in American history.
The consequences are immense.
This year, the government is projected to spend $316 billion on interest payments for its debt. In 2022, those costs will rise to $643 billion, far surpassing the government’s Medicaid budget.
In times of economic strength, such as now, deficits tend to contract, with emergency spending measures rolling off the federal balance sheet and coffers flush with tax receipts.
The White House and Congress have taken a much different approach in the past 16 months, committing to more than $1 trillion in future spending and slashing tax rates across the board. They are betting big that economic growth alone will solve future problems, though they lack any backup plan if this promise eludes them.
If there is an economic downturn, the debt will spike even faster, because the United States will be forced to borrow even more money to pay for things such as expanded unemployment benefits, food stamps and other safety net programs.
A small but vocal group of progressive economists insists that debt fears are overblown, arguing that the resources to pay it down are readily available. From Congress’s mainstream Democrats all the way to its most conservative members, there is broad agreement that the spiraling deficit is a major problem.
Still, lawmakers have known for years these problems were approaching, but in the past 18 months they have cast aside these concerns.
“No wonder Americans hate this place,” Jordan fumed on the House floor Thursday. “No wonder they are cynical. I don’t blame them. This ticks me off. There’s just no other way to say it.”
Republicans often complain that the only way to corral the budget is by restricting future spending in Medicare, Medicaid and Social Security, but Democrats see this as an attempt to hollow out programs that are designed to help the elderly and the poor. This mistrust has led both parties to effectively abandon any pretense to make changes, something Trump solidified during the campaign when he declared cuts to the programs off limits.
The government will spend $1.7 trillion on Medicare and Social Security this year, accounting for 41 percent of all federal spending.
“In the longer term, both parties, Republicans and Democrats, are going to have to find a way together to save those programs for the long term,” House Ways and Means Committee Chairman Kevin Brady (R-Tex.) said. “It’s got to be thoughtful and deliberate, and we’re going to have to do it together.”
Based on some measures, the government now has $21 trillion in debt.
The Congressional Budget Office projects that the Trump administration will spend $981 billion more than it brings in through revenue next year, and that gap — called the deficit — will eclipse $1 trillion in perpetuity by 2020.
In 2010, as the tea party wave took control of Congress, Republicans extracted a number of concessions from the Obama administration meant to arrest future government spending.
Almost all of those changes either failed or were later removed. A fiscal commission led by Democrat Erskine Bowles and Republican Alan Simpson forced a national conversation on future debt, but it was ultimately dismissed by both parties as politicians became entrenched.
After that, Americans seemed to lose focus on the issue. A January survey by the Pew Research Center found that 48 percent of Americans believed that the budget deficit was a top priority, compared with 72 percent in 2013. Corker said this ambivalence was part of the problem, as it has made it easier for Washington to duck the issue as well.
“At some point the American people will wake up,” Simpson said in an interview.