Sinking the nation ever deeper into debt
The budgeting methods in Washington make Connecticut’s fiscal approach look downright disciplined. At least the state balances its budget. There is not even a pretense in Washington about doing so.
The president’s fiscal-year 2020 budget proposes record high outlays of $4.75 trillion in 2020, a 4.8 percent increase following about a 10 percent increase this year. The budget projects taking in $3.65 trillion in taxes.
That’s a built in $1.1 trillion deficit, which is probably optimistic.
Granted, this reckless approach to the federal purse has a long history. Not since Democratic President Bill Clinton’s second term in office, working with a fiscally conservative Republican Congress, has Washington balanced a budget.
The election of Republican President George W. Bush followed in 2000, a time in office that included tax cuts, the ill-conceived invasion of Iraq (the cost of which was never accounted for) and the economic collapse at the end of Bush’s second term, which sent tax revenues plummeting.
President Barack Obama’s term began with bailouts and Keynesian investments and more tax cuts to stimulate the economy. Later in Obama’s term, efforts to reach a "grand bargain" with then Republican House Speaker John Boehner, involving proposed tax and entitlement reforms to trim $4 trillion in projected debt growth, failed in a political environment in which compromise was unacceptable.
The Obama-Boehner gambit was the last serious attempt to fix things.
Failing to slow debt growth will depress economic expansion and wages and drive up interest rates. It is a disservice to future generations. However, the parties feel no political pressure to address the situation.
Using fiscal year 2019 projections, the national debt has grown about another 30 percent during Trump’s time in office, now standing at $22.1 trillion, about $67,500 per citizen. At $351 billion, net interest on the debt is the fourth highest expense after Medicare/Medicaid, Social Security and defense spending.
Republicans, when in full control of Congress during President Trump’s first two years, ignored the deficit after having hounded Obama about it for eight years. They passed a massive tax cut targeted at the rich without any corresponding spending reductions.
Changes to entitlement programs will at some point be necessary to avoid fiscal disaster. There are solutions. Wealthy seniors could be made to pay for more of their own coverage, curbing Medicare costs. The government could take an aggressive approach to control drug costs, but Big Pharma is a powerful lobby. And the rich should contribute more to Social Security.
And with the economy strong, Congress should be increasing taxes and addressing the debt, not cutting taxes.
In this budget plan, the Trump administration claims some entitlement savings, but they don’t hold up to scrutiny.
Meanwhile, proposed cuts in environmental, education, housing assistance and health and human services are a political ploy and will never get through the Democratic House.
The Trump proposal again increases defense spending, and we welcome the proposal to buy three attack submarines in fiscal year 2020 as opposed to the current two planned. Unfortunately, the administration uses a shell game to help pay for it and that’s not acceptable.
The budget finds $100 billion in new defense spending by using an off-the-books account intended for national defense emergencies — the Overseas Contingency Operations account. This budgetary trick is not new, but the Trump White House would take it to a new level.
“As in previous years, (Trump) relies on far too many accounting gimmicks and fantasy assumptions and puts forward far too few actual solutions,” stated Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
The nonpartisan budget watchdog concludes that using reasonable economic assumptions, the Trump budget would require another $10.5 trillion in borrowing over the next decade, not the $7.8 trillion projected.
With Trump and the Republicans fixated on their tax cuts and Democrats on expansion of social programs, don’t expect much debate on fiscal responsibility in the run up to the 2020 election — that is unless you, the voter, demands it.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Tim Cotter, Staff Writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.