The headline in a recent edition of The Boston Globe read, “White House proposes $4.4 trillion budget that adds $7 trillion to deficits.”
That a $4.4 trillion budget could produce $7 trillion in debt is pretty amazing, especially considering that, “The budget calls for steep cuts in domestic programs and entitlements.” The White House has proposed $540 billion in nondefense spending for 2019, which is $57 billion below the spending cap set by Congress.
The federal government collects more than $3.5 trillion in revenue a year. But, according to The Globe, $4.4 trillion – $3.5+ trillion = $7 trillion. Of course, a full explanation won’t fit in a headline and The Globe was trying to say that the proposed budget would add $7 trillion to the federal debt over the next decade.
However, The Globe noted that the proposed budget “has little to no chance of being enacted as written.” If that’s the case, how can it produce $7 trillion in debt, even if we were able to forecast spending over the next decade?
Regardless, we hopes the deficit can be reduced, as the level of spending by the federal government is unsustainable. Our legacy should not be to leave our children and grandchildren with tens of trillions of dollars in debt.
No More “Peace Dividend”
The latest budget proposal would restore some spending to the defense budget, which experts say has been underfunded for two decades. Since the Cold War allegedly ended and the “peace dividend” began during the Clinton years, the world has become much more dangerous – and although less of the overall budget has gone toward defense, the budget as a whole has grown even more rapidly.
Yet the main reason the budget is likely DOA is that it attempts to cut entitlement spending.
Herb Weiss, who writes about aging and healthcare, wrote that, “The National Committee to Preserve Social Security and Medicare (NCPSSM) expresses concern that Trump’s budget proposal contains many of the same harmful proposals that the Administration and Republican-controlled Congress has pushed before, including $1.4 trillion in Medicaid cuts, $490 billion in Medicare cuts, and repeal of the Affordable Care Act.”
The NCPSSM would call any cuts “harmful,” and it may be correct, especially given that the proposed cuts would be taking place as America’s 77 million baby boomers are retiring.
However, the higher the federal debt goes, the more we’ll be paying each year just on interest. Already, we’re paying nearly a half trillion dollars a year ($458,542,287,312 for FY 2017) on interest that could be used for other spending needs if it weren’t for debt that mounts every year because of ongoing spending obligations.
During the years 2009 through 2012, the federal deficit was $1.413 trillion, 1.294 trillion, $1,295 trillion and $1,087 trillion. In 2013, with a Republican majority in Congress, the “fiscal cliff” negotiations took the budget deficit down to $679 billion in 2013 and $485 billion in 2014. By 2017, it creeped back up to $665 billion.
If deficits in previous years had been kept lower, particularly during the Obama and Bush administrations, we would be in a better position to fund domestic programs. However, with interest rates starting to increase, interest payments on the federal debt will become even higher.