Editor’s Note: Maya MacGuineas is the president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt. The opinions expressed in this commentary are hers.
Thanks to the recent budget-busting tax cuts and spending deal, the national debt is skyrocketing and on an unsustainable course. And where there is debt, there are interest payments on that debt.
In fact, interest is by far the fastest growing part of the budget.
In our latest nonpartisan analysis, we found that interest payments will quadruple, topping $1 trillion per year in as little as a decade. That’s more than we will spend each year on the military or Medicaid, and as a share of the economy, it is the highest in history.
As the country spends more and more to service our debt, it leaves less room to spend on everything else, from defense to education to infrastructure to new tax cuts.
Over the next decade, we’ll spend around $7 trillion – $55,000 per household – just servicing our debt. That’s hardly the best use of our scarce tax revenue.
Unfortunately, we can’t just cut these interest payments; they represent commitments to our creditors. But a thoughtful plan to slow the growth of our rising debt can help keep interest rates down and prevent interest payments from eating up our entire budget.
Sadly, policymakers have spent the past year doing exactly the opposite. Between massive new tax cuts and massive spending hikes, Congress has added over $2 trillion to projected debt. We’re addicted to debt!
So, how do we fix this?
The first step is admitting we have a problem. We need a national debt audit, and members of Congress need to recognize and be held accountable for their votes.
This isn’t about playing the blame game, it’s about recognizing that all choices have a cost. It’s easy to run up charges on the national credit card, but paying it off isn’t as fun. Yet failure to do so is exactly why we face the prospect of trillion-dollar deficits next year and trillion-dollar interest costs within a decade.
Once we admit to this debt addiction, we need to stop feeding it. Washington has to start abiding by the basic principle that if something is worth having, it is worth paying for. Each and every member of Congress should make a commitment not to add more to the debt; those who are not willing to stand by such a commitment should explain to voters why they think asking our kids to pay our bills is the right thing to do.
But it’s not enough to stop digging – it’s time to start tunneling our way out. That means raising new revenue to cover the cost of the tax bill by cutting tax breaks, closing loopholes, or introducing a new revenue source, a carbon tax perhaps. It also means setting realistic but responsible discretionary spending levels for the next decade, offsetting any increases with cuts elsewhere.
Most importantly, we need to fix our health and retirement programs for the people who depend on them. While interest is the fastest growing part of the budget, health care is the second fastest and Social Security is the third. The Medicare trust fund is projected to run out of money in seven years, Social Security Disability in five, and Social Security retirement in 12, according to the nonpartisan Congressional Budget Office.
We need to slow the growth of, and fully fund, these programs. When it comes to Medicare, President Trump’s budget has a number of good ideas to get more value for our dollars. President Obama had similar ideas. When it comes to Social Security, we need a 75-year solvency plan that ensures the program is fully funded for future generations.
There are many options to fix the debt, but denial isn’t one of them. The toxic rhetoric on both sides has to stop so policymakers can come together in the spirit of compromise to find the right mix of revenue and spending changes to actually fix the problem. Every minute that passes, the decisions become more difficult.
No American family wants credit card interest as the largest item in their budget, and the US government shouldn’t either. Just think of all the things that money could buy. No one and no priority is spared from these levels of debt. Members of Congress, Mr. President, it is time for a plan.