Earlier this month in testimony before the U.S. Senate Intelligence Committee outlining the major national security threats facing the country, former Senator Dan Coats, currently President Trump’s Director of National Intelligence, said:
“The failure to address our long term fiscal situation has increased the national debt to over $20 trillion and growing. This situation is unsustainable … and represents a dire threat to our economic and national security.”
Last fall in an op-ed piece current U.S. Senator David Perdue (R-GA), a member of the Armed Services Committee, wrote “The single greatest threat to our national security is our national debt.”
Despite these and similar warnings from other current and former government officials, over the last two months Congress has passed, and the President has signed, two bills that substantially increase the national debt even further.
Indeed, the federal Office of Management and Budget recently admitted that even with the spending cuts reflected in the President’s most recent budget proposal, national debt is projected to rise from the current year an additional $8.7 Trillion over the next decade and the annual budget will not be back balance even by the end of that period.
The nonpartisan Congressional Budget Office is expected to provide an even more dire assessment in the next few weeks.
Our national debt as a share of the economy is already almost twice the historic average over the past 50 years, higher than any time in history except World War II. If not brought under control it will stunt investment, slow wage growth, increase interest rates, and pass a massive financial burden onto future generations.
To be sure, tackling the national debt requires tough decisions, but it only gets more difficult the longer we wait. As the debt becomes more uncontrollable, it will eventually require both higher tax increases and more severe cuts to spending — both non-military and military — than would have been needed if lawmakers had acted in a timely manner.
Letting the current situation fester also reduces the federal government’s capacity to respond to unexpected crises.
Before the last recession, debt was only half of what it is today as a share of the economy. The United States was able to endure and ultimately, climb out of that recession by strategically using our debt capacity. But unless we replenish that capacity now, by reducing debt back to prudent levels in the midst of a strong economy, we will not have sufficient capacity remaining to respond to the next, inevitable difficulty without significant adverse consequences.
Our aging population, rising health care costs, growing interest costs, and lack of revenue are considerable challenges, but as the nonpartisan and highly regarded Committee for a Responsible Federal Budget has outlined, they are surmountable.
The first step involves responsibly addressing our spending levels, at a minimum making sure that we offset any needed increases in some defense and nondefense spending areas with real cuts and reforms elsewhere, necessarily including our current, so-called mandatory spending programs. The second step, efforts to slow the growth of healthcare spending, should follow, making sure that Medicare and Medicaid focus more on value rather than quantity of care.
The third step should aim to keep Social Security solvent for future generations through a mix of benefit formula adjustments, new revenues, and other changes such as increasing the retirement age. Any changes made today can be gradual and targeted, giving workers time to plan and adjust while protecting lower-earning seniors.
And finally, but inevitably given the size of the task, in the not too distant future we need to revisit the tax code. We must do far more to cut the $1.5 trillion of annual tax breaks in the code – almost none were eliminated in the legislation that just passed. And, to be blunt, fixing the debt will require some new revenues.
This country needs a more stable fiscal foundation, not more debt. To address both the Nation’s long-term security and our children’s long-term financial well being, lawmakers need to start filling the hole, not digging it deeper.
Brad Keithley is Managing Director for Alaskans for Sustainable Budgets.