Loading...

Once COVID is Slain, Sustainable Budgets Must Be Priority

March 5, 2021 by TWN Staff
Once COVID is Slain, Sustainable Budgets Must Be Priority
Michael A. Peterson, Chairman and Chief Executive Officer, Peter G. Peterson Foundation.(Photo courtesy the Peter G. Peterson Foundation)

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

Health

Voting

Federal Budget

May 13, 2022
by Tom Ramstack
Space is the Future for National Defense, Military Officials Tell Congressional Panel

WASHINGTON — Space was described as the final frontier for defending the United States against weapons of mass destruction from... Read More

WASHINGTON — Space was described as the final frontier for defending the United States against weapons of mass destruction from China and Russia at a congressional hearing Friday. Leading the U.S. defense effort is the Space Force, a new branch of the military that seeks to... Read More

April 27, 2022
by Alexa Hornbeck
FDA Falls Short of User Fee Goals but Still Seeks Double the Budget

WASHINGTON — Members of the Senate Committee on Health, Education, Labor and Pensions wanted to know why the U.S. Food... Read More

WASHINGTON — Members of the Senate Committee on Health, Education, Labor and Pensions wanted to know why the U.S. Food and Drug Administration is requesting nearly double its annual budget while failing to meet many of the goals tied to user fee agreements.  “It should be... Read More

April 8, 2022
by Dan McCue
Fiscal Watchdog Says Recess Will Give Senate Time to Fix Flaw in Relief Funding

WASHINGTON — The bipartisan COVID-19 relief bill introduced this week in the Senate had a fatal flaw beyond a lack... Read More

WASHINGTON — The bipartisan COVID-19 relief bill introduced this week in the Senate had a fatal flaw beyond a lack of support from Republicans, its “pay-as-you-go” billing was completely illusory, a prominent fiscal watchdog said Friday. The Concord Coalition is a nonpartisan organization that has been... Read More

March 15, 2022
by Dan McCue
Shalanda Young Confirmed as OMB Director

WASHINGTON — The Senate on Tuesday voted 61-36 to confirm Shalanda Young as director of the Office of Management and... Read More

WASHINGTON — The Senate on Tuesday voted 61-36 to confirm Shalanda Young as director of the Office of Management and Budget, making her the first Black woman in history to head the office and the fifth Black woman to be named to President Biden’s Cabinet.  Young’s... Read More

March 15, 2022
by Alexa Hornbeck
White House Outlines Dire Outcomes if Congress Fails to Pass COVID Relief Aid Bill 

WASHINGTON — The White House issued a letter to House Speaker Nancy Pelosi on Tuesday outlining what might happen now... Read More

WASHINGTON — The White House issued a letter to House Speaker Nancy Pelosi on Tuesday outlining what might happen now that the $22.5 billion in COVID-19 relief aid was dropped from the Consolidated Appropriations Act of 2022. “We continue to urge Congress to promptly provide the... Read More

Top Lawmakers Reach Deal on Ukraine Aid, $1.5T Spending

WASHINGTON (AP) — Congressional leaders reached a bipartisan deal early Wednesday providing $13.6 billion to help Ukraine and European allies... Read More

WASHINGTON (AP) — Congressional leaders reached a bipartisan deal early Wednesday providing $13.6 billion to help Ukraine and European allies plus billions more to battle the pandemic as part of an overdue $1.5 trillion measure financing federal agencies for the rest of this year. Though a... Read More

News From The Well