Washington’s Short-Term Thinking Won’t Head off the Coming Debt Crisis

Michael D. Tanner

Recently, The Daily Beast reported that when President Trump was briefed early last year about the future consequences of the federal debt, he replied bluntly, “Yeah, but I won’t be here.”

It would be easy to shake our heads at yet another example of the president’s inability to think beyond the present. But Trump is hardly alone in his disregard for our looming debt crisis; with characteristic pithiness, his dismissive response expressed the basic attitude of most Washington lawmakers.

Lawmakers and President Trump must look beyond their own immediate political prospects to imagine the country they’ll leave behind.

Yet, if we don’t stem the rising tide of red ink it will pose an intolerable burden for our kids and grandkids. But to be fair to lawmakers, they’re not wrong: The bill for our profligacy won’t come due until well after the next election. Our children and grandchildren don’t vote. And anything done today to fix the problem — raising taxes, cutting spending, reforming entitlements, etc. — will anger one group or another of Americans who do vote.

Because most lawmakers indulge such a short-sighted, self-interested stance, however, the federal deficit will exceed $779 billion this year and top $1 trillion in the next. The national debt now exceeds $21 trillion. And it will get worse. The federal debt will double as a percentage of the economy within the next 30 years. Within the next 75 years, the debt could exceed a phenomenal 600 percent of GDP, according to the Committee for a Responsible Federal Budget.

Interest on the debt is already the fastest-growing portion of the federal budget, and as interest rates begin to rise, it will skyrocket even faster. Within the next five years, interest on the debt is expected to be larger than the defense budget. By 2050, it will exceed Social Security spending, and, by 2070, it will exceed spending on Medicare, Medicaid, and Obamacare combined. No matter what your political perspective or policy priorities, that can’t be an enticing prospect.

Yet the Trump administration and its congressional allies continue to pursue a policy of increasing both domestic and defense spending, protecting entitlements, and reducing taxes. (One can at least claim that the tax cuts have increased economic growth in the short term: Despite the cuts, revenues are still up by roughly 1 percent this year.)

Now we are approaching yet another government showdown. Congress has only been able to pass seven of the required twelve appropriations bills it must pass by December 21 to avoid a partial shutdown over Christmas, although the remaining five are expected to be rolled into a single spending measure. Bipartisan negotiations have broken down, after an Oval Office meeting Tuesday between Trump and Democratic leaders went nowhere.

And what has led to this impasse? Is Congress debating how to control spending or reform entitlements (or even tax policy)? No. They have already agreed that this funding bill will increase spending substantially. Instead, they are fighting over whether spend an additional $5 billion on the president’s border wall.

The dirty little secret of Washington is that very few lawmakers actually care about the deficit or the debt. Occasionally it may provide a useful cudgel with which to beat the opposing party. But no one is going to do anything about it without a president who cares more about the country he will leave behind for his successors than about his present-day approval ratings.

Michael Tanner is a senior fellow at the Cato Institute and the author of Going for Broke: Deficits, Debt, and the Entitlement Crisis.