Automatic spending including interest on our national debt is outpacing our economy, according to a Congressional Budget Office (CBO) report.
During a Senate Budget Committee hearing on the CBO Budget and Economic Outlook for fiscal years 2018 through 2028, U.S. Senator Mike Enzi, R-Wyo., said we need a combination of lower spending and higher revenue to avoid bankrupting the country.
“Automatic spending programs like Social Security and Medicare are growing disproportionally to their revenue and outpacing the economy,” Enzi said. “This spending with interest payments on our debt will soon consume all the taxes and revenues the federal government collects. Congress must come to terms with this overspending. Our government makes promises to pay for these programs without identifying a source of funding to ensure their sustainability.”
Enzi also pointed to the threat of government shutdowns as a major driver of spending increases. He noted that since the failure of the Joint Select Committee on Deficit Reduction created by the Budget Control Act of 2011, the nation has seen Congress repeatedly approve bills that facilitate increased spending, such as the Bipartisan Budget Act of 2018. This law raised the caps on regular discretionary spending by $296 billion over fiscal years 2018 and 2019. CBO estimates that if appropriations were to grow at the rate of inflation after 2018, rather than returning to the Budget Control Act’s lower caps, discretionary spending would increase by $1.7 trillion over the next 10 years compared with CBO’s baseline.
“To really address the fiscal imbalance, we can either reduce spending or increase our projected economic growth – but preferably, some combination of the two,” Enzi said. “The Tax Cuts and Jobs Act, passed last year, was a good first step toward growing our economy. It is already producing higher wages, more dollars in workers’ paychecks and increased domestic investment. But we need to set long-term goals to ensure a sustainable debt-to-GDP ratio, so our overspending does not ultimately bankrupt the country. The continued growth of our national debt is something this committee and Congress need to address.”