Addressing the Biggest Threat to Our Children’s Future: Unsustainable National Debt
David Ditch /
This article is an excerpt from the “2020 Mandate for Leadership: A Clear Vision for the Next Administration.” It looks back at policy decisions made by the Trump administration over the past four years. You can purchase your copy of “Mandate 2020” here.
Over the past four years, lawmakers have failed to make any meaningful budget reforms, and the nation’s deficit and debt levels have continued to grow as Congress and the Trump administration have enacted legislation that only makes the problem worse.
For example:
- In February 2018, the Bipartisan Budget Act of 2018 was signed into law. The law was the third in a series of two-year budget deals to raise the Budget Control Act of 2011’s discretionary spending caps. The 2018 deal raised base discretionary spending by nearly $300 billion for fiscal year 2018 and fiscal year 2019—an amount that was more than double the previous two deals combined and includes enough mandatory spending reforms to pay for only about 10% of the new spending authorized by the act. The Committee for a Responsible Federal Budget estimated that the long-term debt impact of the deal could be over $2 trillion.
- In addition, the two-year budget deal suspended the debt limit through March 1, 2019. This allowed the federal government to continue to accumulate an unlimited amount of debt and required no spending cuts or reforms in return.
- The Bipartisan Budget Act of 2018 also set the stage for another budget caps deal for fiscal years 2020-2021, the last two years of the Budget Control Act’s discretionary spending caps. In July 2019, the Bipartisan Budget Act of 2019 was enacted. The fourth two-year budget cap deal since the passage of the Budget Control Act raises discretionary spending by $324 billion for fiscal years 2020-2021. Less than 20% of the new spending is offset by the act.
- In addition to the Budget Control Act cap-busting deals, Congress has continued to abuse emergency and disaster spending. In fiscal year 2018 alone, Congress appropriated more than $125 billion in uncapped supplemental disaster and emergency funding, only about one-third of which was allocated to direct disaster response and recovery.
The Trump administration has made modest attempts to rein in the national debt. The president’s fiscal year 2018 budget would have reached balance within the 10-year budget window and began to pay down the national debt as a share of growth domestic product. The administration’s fiscal year 2019 and fiscal year 2020 budgets, however, failed to reach the goal of balancing in 10 years.
All of the president’s budget proposals have called for significant reductions in nondefense spending. This allows the federal government to focus on its core constitutional responsibilities, like national defense, while living within reasonable spending limits. It is also key to reducing the scope of the federal government and enabling private innovation as well as empowering state and local authorities to address the needs of their populations.
Congress has failed to act on these reforms.
In support of this effort, the administration also submitted a rescissions package to Congress that would have recovered billions of unused federal dollars.
Rescinding unobligated funding has long been a presidential and congressional power. It allows the federal government to adjust to changing budget needs and reprioritizes funding as necessary.
Congress was unable to pass this package because lawmakers wished to repurpose these unspent funds rather than use them for deficit reduction.
While the administration’s work to limit the size and scope of the federal government is important, it is not significant enough to fix the long-term problem of sustainability that the federal budget faces.
Two-thirds of the federal budget goes toward autopilot mandatory programs such as Medicare, Medicaid, and Social Security. The president’s budget proposals have put forth modest health care and Social Security Disability Insurance reforms, but they would not fundamentally reshape these programs.
In fact, they have left Social Security’s Old-Age and Survivors Insurance program, the largest single federal program, untouched.
Without significant reforms to ensure the long-term solvency of entitlement programs, it will be impossible to balance the budget and change the nation’s fiscal course for the better.
The lone attempts at spending reforms from Congress have been the budgets proposed by the House Budget Committee in fiscal year 2018 and fiscal year 2019 and the Republican Study Committee’s proposals for fiscal year 2018-2020. Each of these proposals would have balanced the budget in less than 10 years while significantly reforming entitlement programs.
The Republican Study Committee’s budgets in particular show the type of strong leadership and reforms that are needed to reshape the federal budget and get the nation’s fiscal house back in order.
Each of these proposals would have made significant progress toward reducing the national debt and restraining spending, but much like the president’s budgets, they were given little consideration by Congress.
Congress also established a Joint Select Committee on Budget and Appropriations Process Reform, a product of the Bipartisan Budget Act of 2018.
The committee was tasked with “provid[ing] recommendations and legislative language that will significantly reform the budget and appropriations process” in hopes of ending the budget dysfunction that has consumed Congress over the past few decades.
Ultimately, the committee produced reforms that did nothing to address the actual debt and actually could have made the current budget process even less responsible and transparent than it already is.
However, the legislation was never brought to the House or Senate floor, and no changes were enacted.