The House of Representatives this week easily passed bipartisan debt and budget legislation to permit the Treasury to issue bonds to pay the government’s bills and lock in place recent budget gains for both the Pentagon and domestic agencies.
The agreement lifts the limit on the government’s $22 trillion debt until the end of July 2021. The agreement averts the risk of the Pentagon and domestic agencies from being hit with $125 billion in automatic spending cuts that are all that’s left of a failed 2011 budget pact.
By one measure, the price tag for the legislation posts at $324 billion. But more than two-thirds of that is to simply maintain current spending levels rather than fall prey to the automatic spending cuts, known as sequestration. Another measure is $103 billion, spread over two years to Pentagon and domestic accounts, to permit modest budget hikes of 3 or 4 percentage points above current levels.
As you probably know, there is a legal limit to the amount of money that the federal government may borrow. The limit is set by Congress, not presidents. It is Congress who must decide whether to curtail spending or raise the debt limit.
There is another choice, of course, and that is to raise taxes to support whatever spending is desired by Congress. This, however, is not a strategy for those who wish to remain in office. And, remaining in office is a very high priority for almost all members of Congress.
Reducing spending is also an unpleasant task. Members know that their voters expect them to oppose excessive government spending. At the same time, however, the same voters expect support for spending on programs that directly benefit them. High on most voter lists are programs such as Medicare and Social Security. Most, especially Medicare, are huge consumers of government dollars and directly benefit the middle class. Trifling with such benefits is a political hot potato and efforts to find middle ground have been unsuccessful so fair.
But, you also have to remember that the government has not been reluctant to withhold money from workers’ payroll checks to pay into Social Security and Medicare. And, it’s not a very good argument to cut neither Social Security nor Medicare when lawmakers draw a large government pension from serving in Congress, and receive government-paid health insurance.
So for decades, Congress and presidents have taken the easy way out…borrow more money. The national debt by the time the new agreement on borrowing expires, is likely to exceed $24 trillion, money that the next generation, and the generation after that, and generations to follow will be paying on.
Aside from fiscal hawks, few people seem to care anyone. Most just want to make sure they get their Social Security and Medicare.
The economy is doing well, interest rates and inflation are low, and besides, few of us can actually comprehend the meaning or impact of trillions of dollars.
This spending spree will continue unabated because there appears to be no consequences to not living within our means.
Where is this money coming from? Much of it must be borrowed from other countries, among them China.
How this will end is uncertain. But the rapid growth of government spending well beyond what we take in cannot continue indefinitely unless good times are with us forever. But, it’s always been said, “there is a payday someday” and “somebody must pay.” Also, nothing is free.
America’s political leadership is being deeply irresponsible in burdening current and future Americans with unfathomable amounts of debt — debt that will eventually have to be paid.