It’s easy to find fault with a major budget deal in Washington. The one just passed by Congress is no exception. Those on the right say it does too much, while those on the left will say it does too little. That’s a sign that it may be just right.
Congress has been grappling with ballooning deficits for several years, and in 2011 a bipartisan budget agreement put “hard caps” on federal spending, including defense and domestic programs. But since then the country has been hit with several huge storms that racked up $90 billion in repair costs that the federal government has agreed to cover. And even as the U.S. military budget has held steady, the ongoing fight against Islamic terrorists, as well as the nuclear threat from North Korea, have driven up necessary military spending. In the meantime, our military equipment has aged and our readiness has declined.
There is also general bipartisan agreement that domestic priorities like children’s health and medical research deserve adequate funding too. And the country’s well-documented infrastructure needs will require additional federal spending, especially since it will leverage trillions of investment dollars repatriated by åU.S. corporations under the recent federal tax overhaul.
The sobering reality is that for the foreseeable future, federal deficits may top $1 trillion a year. That’s even with a growing economy generating more tax revenue for the federal government. Combined with the recent federal tax cut, the budget deal could add over $500 billion to this year’s deficit. Without action on these deficits, in a decade, total U.S. debt could exceed $30 trillion, a 50 percent increase over the current national debt.
The proposed agreement before Congress would raise the national debt ceiling through next November, after the midterm elections. That should give Congress and President Trump the breathing room to get down to reforming the main federal domestic spending programs that consume a large share of the federal budget. I’ve talked before about the necessary modest reforms to Social Security and Medicare that can keep them solvent for both current and future beneficiaries. If these sensible reform measures are not undertaken, our kids and grandkids could face a national debt of such proportions that their standard of living could fall below the current generation’s.