Once COVID is Slain, Sustainable Budgets Must Be Priority
WASHINGTON – A Congressional Budget Office report estimating that persistent budget deficits will cause the federal debt to double in size over the next 30 years, “provides a troubling snapshot of America’s fiscal outlook, which we know will only get worse from here,” according to the head of the Peter G. Peterson Foundation, a fiscal watchdog.
In a report released Thursday, the CBO said that since the 2008 financial crisis and the pandemic, the government has depended heavily on borrowing and low interest rates to help an ailing economy.
But as the economy is expected to heal, the CBO has forecasted that interest rates will rise and spending on programs such as Social Security and Medicare will increase.
The estimates do not include President Joe Biden’s proposed $1.9 trillion coronavirus relief package, which would further add to the deficit in hopes of speeding faster growth and hiring.
Excluding Biden’s aid plan, the annual budget deficit would be equal to 10.3% of this year’s gross domestic product, a measure of the total size of the U.S. economy. The annual deficit as a percentage of GDP would decline over the next decade and then rise in the following decades to reach 13.3% in 2051.
All of that translates into the U.S. government carrying a higher debt load. The CBO said that publicly held debt would equal 102% of this year’s GDP. It estimated that the accumulated debt would grow to 202% of GDP by 2051.
Responding to all this, Michael A. Peterson, CEO of the Peter G. Peterson Foundation, said that prior to the pandemic, “we were already facing growing, trillion-dollar structural deficits, and this crisis has added trillions more, with additional amounts yet to come that are not even accounted for in CBO’s projections.
“Leaders must prioritize our public health and economic recovery, but they also need to be ready to act on fiscal solutions once the crisis has passed,” he said.
He then went on to note that the national debt crossed $28 trillion for the first time this week, “a staggering amount” and a milestone “that represents an enormous burden on our kids and grandkids.
“Worse yet, there is nothing but rapid growth in the years to come,” he said. “Interest on the debt will grow faster than any other budget category and reach unprecedented levels as a percentage of federal revenues and GDP. CBO projects that the government will spend more than $61 trillion in interest alone over the next three decades. These payments obviously do nothing to help address the many important challenges we face, such as climate change, infrastructure, economic justice, and national security.
“Once we tackle this terrible pandemic, lawmakers should work together to take control of our budget. Policy solutions are well known and available — they just require leadership. A fiscally sustainable foundation is vital to creating a stronger economy, enabling smart investments in our future and increasing opportunity and preparedness for the next generation,” Peterson said.
In The News
WASHINGTON — If the debt limit remains unchanged and the Treasury Department follows through on transferring $118 billion to the... Read More
WASHINGTON — If the debt limit remains unchanged and the Treasury Department follows through on transferring $118 billion to the Highway Trust Fund on Dec. 15, the federal government could run out of cash before the end of the month, the nonpartisan Congressional Budget Office said... Read More
WASHINGTON (AP) — It took half a year but Democrats have driven President Joe Biden’s $2 trillion package of social... Read More
WASHINGTON (AP) — It took half a year but Democrats have driven President Joe Biden’s $2 trillion package of social and climate initiatives through the House. It gets no easier in the Senate, where painful Republican amendments, restrictive rules and Joe Manchin lurk. Facing unbroken GOP opposition, Democrats... Read More
WASHINGTON — House Appropriations Chair Rosa DeLauro, D-Conn., said Thursday she wants the House to pass a short-term continuing resolution... Read More
WASHINGTON — House Appropriations Chair Rosa DeLauro, D-Conn., said Thursday she wants the House to pass a short-term continuing resolution that doesn’t extend into the new year so that Congress has time to negotiate an omnibus package but doesn’t incentivize dawdling. Government funding runs out on... Read More
WASHINGTON — The federal government will run out of money and the nation will descend into its first-ever default on... Read More
WASHINGTON — The federal government will run out of money and the nation will descend into its first-ever default on its debts if lawmakers don’t take action on the debt limit by Dec. 15, Treasury Secretary Janet Yellen said in a letter to Congress on Tuesday.... Read More
WASHINGTON (AP) — Rarely have the leaders of Congress been asked to do so much, with so little, as in... Read More
WASHINGTON (AP) — Rarely have the leaders of Congress been asked to do so much, with so little, as in navigating President Joe Biden’s big domestic vision into law. Reaching for FDR-style accomplishments with slimmer-than-ever Democratic majorities has been politically messy at best, arduous at worst, and about... Read More
WASHINGTON — Bowing to resistance from House moderates, Speaker Nancy Pelosi this afternoon has evidently decided to advance the bipartisan... Read More
WASHINGTON — Bowing to resistance from House moderates, Speaker Nancy Pelosi this afternoon has evidently decided to advance the bipartisan infrastructure bill while putting final vote on the budget reconciliation bill on hold. The decision came after the House Democratic leadership allowed a vote on a... Read More