WASHINGTON — Here’s a bar tab you wouldn’t ever want: Within 10 years, the federal government will owe foreign and domestic creditors at least $28.5 trillion.
$28.5 trillion, with a "T." That’s $28,500,000,000,000. Under conservative economic projections.
And there’s no sign that anyone in Washington has the will to do anything about it.
"They don't care about it," said former Ohio Gov. John Kasich, who as chairman of the House Budget Committee helped shepherd into law in 1997 a bill that balanced the federal budget within one year. "Santa Claus has always been popular."
Robert L. Bixby, executive director of the nonpartisan Concord Coalition, said, “If it seems nobody in Washington cares about the issue, you’re right.”
When the Senate passed a two-year budget bill Thursday that also would upend the debt ceiling through 2021, it was lauded as a rare bipartisan victory during one of the most rancorous political environments in recent history.
But the measure also added $324 billion in spending over two years — a notion that made budget watchdogs grit their teeth as lawmakers continue to ignore a federal debt that is mounting rapidly. That increase was solely on discretionary spending — not entitlement programs including Medicare and Social Security, which accounted for 61 percent of federal spending in 2018.
Democrats are still irritated about a 2017 GOP tax cut that increased the debt, so they’re loath to tackle the problem. Republicans know that the issue is “not a priority” for President Donald Trump, said Bixby, and are therefore unwilling to stick out their necks too far to make hard choices that could irritate constituents.
“Political forces are coming together to push fiscal responsibility to the cutting room floor,” said Bixby.
Kentucky GOP Sen. Rand Paul, one of the rare dissenters to the budget deal struck by Trump and House Speaker Nancy Pelosi, said its approval "marks the death of the tea party movement in America."
But political rhetoric aside, how does an increasing national debt affect you?
Michael A. Peterson, chairman and chief executive officer of the nonpartisan spending watchdog Peter G. Peterson Foundation, said one of the most concerning effects will be the amount of interest taxpayers must pay as the debt grows.
Just as a credit card incurs interest charges when it’s not paid off, he said, so does the federal government.
According to the CBO, the federal government — aka U.S. taxpayers — will spend $455 billion on interest next year. By 2029, that figure is projected to rise to $921 billion.
Beginning next year, he said, the federal government will spend more on interest than it will on programs affecting children.
By 2025, he said, taxpayers will pay more on interest than they do on national defense.
“Our budget will be spending more on our past than we do on our future,” Peterson said. “That’s a stark reminder of what we’re leaving our children here.”
It’s a far cry from 1997, when a Republican Congress and a Democratic president pushed the landmark agreement which balanced the budget within a year and continued to do so through 2001 — the last time in U.S. history the federal government didn't spend more than it was taking in.
And it’s also a different approach than in 2011, when the panic over the mounting federal debt spurred Congress to create a “super committee” tasked with negotiating $1.2 trillion in deficit reduction measures over a decade or face the prospect of sweeping, across-the-board cuts to all discretionary programs.
Spoiler alert: The committee couldn’t get it done. And Congress couldn’t even abide by its own self-imposed punishment, opting instead to pass bills to undo those mandatory cuts.
Eight years later, the deficit is still huge: $896 billion this year, according to the Congressional Budget Office, while the White House Office of Management and Budget puts it about $1 trillion.
Add those up over the course of years, and you — the taxpayer, and your kids and grandkids — get to pay the bill. The CBO estimates the debt held by the public — which is money owed by the government to private and foreign investors who buy Treasury bills and government notes — is currently about $16.6 trillion.
That report was issued in May — two months before the House and Senate approved the budget deal, which is expected to add $1.7 trillion more to the debt over the next decade.
In all, under spending bills and other measures signed by Trump, the debt is expected to grow by an additional $4.1 trillion through 2029, according to the nonpartisan Committee for a Responsible Federal Budget.
Why are so few concerned now about an issue that caused so much turmoil eight years ago? Thomas A. Schatz, president of the nonpartisan Citizens Against Government Waste, said he thinks it’s the economy.
While unemployment now is low and the economy is performing relatively strongly, that wasn’t the case in 2011, when the country was still recovering from a recession.
He said that as America recovered, the impetus to tackle fundamental spending problems was strong. Now, with a robust economy, lawmakers are taking for granted things they worried about before. Rather than saving the surplus, they’re spending it.
“Members of Congress love to spend money,” said Schatz. “That’s how they solve problems. If they’re not spending money, they’re not solving problems.”
While the problem might seem abstract — it’s hard to envision what $28.5 trillion looks like — the implications for taxpayers will be acute.
They just won’t be immediate.
“It’s really an erosion problem,” Bixby said. “It’s not like there’s going to be some drop-dead moment or that there’s a red line that if you cross it, the economy goes to hell. It’s rather the more insidious problem of a slower growing economy and lower standards of living than we would have had otherwise.”
He compares it to “having termites in the walls, rather than a wolf at the door.”
But Dean Baker, co-founder of the Center for Economic and Policy Research, said many of the fears expressed by budget watchdogs have not been realized. Threats of higher interest rates haven’t materialized, and the economy has remained strong.
He said dramatic action to solve the problem — spending cuts and higher taxes — could result in higher unemployment and lower wage growth.
“Who really cares (about lower debt) when more people are out of work?” he said. “It’s very hard to see how we would have a better story if we had a lower debt.”
Others warn against dismissing the problem.
Unless Congress passes a tax increase or slashes spending, Kasich worries that the federal government will have to eliminate “programs that we treasure.”
“Is this going to create a risk to the National Institutes of Health?” he said. “It absolutely could. “
Marc Goldwein, senior vice president for the Committee for a Responsible Federal Budget, said the long-term result will be lower wages. He cites a Congressional Budget Office report saying that by 2049, Americans will make $9,000 less in today’s dollars than they would if the U.S. fixes the debt.
Maya MacGuineas, head of the same organization, said, "Unfortunately, our national debt is a self-inflicted wound. It will take the kind of leadership that currently doesn't exist in Washington to fix."