Apparently, Congress is really taking the “you’ve got to spend money to make money” mantra to heart because the US budget deficit hit its highest mark since 2012. Up 17%, $114 billion, from last year, fiscal year 2018’s deficit increased to $779 billion.
Facing massive deficits for as far as the eyes can see, Congress opted to spend more and cut revenues. Earlier this year, Congress passed a budget that blew past the previous caps set in place by a Republican Congress and President Obama – increasing federal spending by $300 billion. Just before that, they passed a $1.5 trillion tax cut without bothering to pay for it with decreased spending or closing loopholes. Thanks to this fiscal negligence, it looks like $1 trillion deficits could return next year.
“In as soon as a year, [deficits] will top $1 trillion and never come back down unless Congress acts,” says Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB). “As expected, recent tax cuts and spending increases – all put on the national credit card – are making a bad problem even worse.”
To make matters even more unmanageable, the Republican controlled House passed another tax cut bill just before they left to campaign for their jobs this fall. That bill would make the tax cuts passed last year permanent instead of letting them expire in 2025, decreasing revenues by about $3 trillion.
Though cutting taxes could be a used as a tool to help the economy grow, it should be coupled with reduced spending or closed loopholes to make up for lost revenue. Instead, Congress has decided it cannot make hard choices on spending, increasing spending for most agencies and trimming little, if any, of the fat. That spending will eventually catch up to the American people one way or another, through reduced opportunity or higher taxes on future Americans to pay for all the debt politicians have created.
This year, net interest alone rose to $523 billion, the highest on record, “which amounts to twice as much as we spend on the Departments of Transportation and Homeland Security combined,” according to the CRFB. It’s expected that paying the net interest on our debt is to cost over $1 trillion in the next decade. Translation: If Congress sits on their hands for another decade, interest spending, that’s money just servicing our debt, will be larger than defense, infrastructure, and health research combined.
Voters will have a chance to speak their minds with the votes they cast this November. If nothing changes, we’re looking at $1 trillion deficits and interest payments that accomplish no American priorities other than not defaulting on our loans. While both parties have bankrupted America, it only takes one good man or woman to change the narrative of one’s party – make sure you do your due diligence.