The Ever-Growing Debt Challenge
Last week, President Trump sent his annual budget request to Congress for consideration. While the president’s proposal is not binding, it does importantly reveal the Administration’s funding priorities for the coming fiscal year and represents a necessary step in the annual budget and appropriations process. Considering that the president’s recommendations are aspirational, some floated ideas were clearly more realistic and sensible than others. But in general, I think President Trump was on the right track to emphasize funding for the nation’s defense and to further restrain some domestic spending.
While I was encouraged that the president’s budget laid out a path toward balance, it is discouraging that – even with proposed discretionary spending cuts – it would take at least 15 years to get there. This illustrates just how serious the fiscal challenge is at hand for our nation, which I believe should cause more urgency in dealing with the real challenge of our nation’s ever-growing debt.
For context, federal spending falls into a couple general categories: discretionary and mandatory. During the annual budget and appropriations process, lawmakers address only the discretionary side of the budget. Mandatory spending, on the other hand, is essentially left as is unless lawmakers offer solutions for reform to various programs—like Social Security, Medicare and Medicaid, which automatically pay out benefits to those eligible and enrolled.
The real challenge is that the mandatory side of the budget – including interest on the national debt – is by far the largest category and rapidly growing. Numerous facts, figures and economic analyses have for years warned about the unsustainable growth of mandatory spending. For example, the Congressional Budget Office (CBO) reported that mandatory represented 34 percent of all government spending in 1965; today, that figure has risen dramatically to reflect more than two-thirds of all spending in 2018. By 2028, mandatory is on track to cover at least 77 percent of all spending.
With mandatory, it’s not only the rapid rate of its growth, eclipsing discretionary, that is alarming. CBO has also projected that the federal trust funds connected to Medicare and Social Security are quickly nearing insolvency and thus will eventually fail to deliver on the benefits promised. On the current path, Social Security as a whole is expected to become insolvent by 2030 – with the Social Security Disability Insurance Trust Fund unable to pay out full benefits as early as 2025.
Clearly, to make real progress toward tackling our burden of debt, tough decisions and careful solutions are required. But the solutions must include reforms to save and sustain the mandatory programs serving many vulnerable Americans. I believe a good place to start would be passage of legislation I introduced again this Congress, the Bipartisan Social Security Commission Act. The bill calls for a bipartisan and bicameral commission tasked with recommending reforms to ensure Social Security is solvent for at least 75 years. Congress would then be required to vote up or down on the commission’s recommendations within 60 legislative days.
The legislation is modeled after the successful approach taken by former House Speaker Tip O’Neill and supported by President Ronald Reagan in 1983, when Social Security was also on the brink of bankruptcy. At that time, bipartisan legislation was approved to stabilize and improve the fiscal foundation of Social Security. And the resulting legislation not only received widespread public support, it extended the life of Social Security. If history is any indication, I believe what worked before to save Social Security can work again—if both parties commit to pursuing reforms in a thoughtful, fair and bipartisan manner.
Even though the president’s budget showed a way to get to balance, I wish his proposal had more seriously addressed the real driver of the nation’s rapidly rising debt. Until congressional leaders and the president work together on mandatory reforms, the nation’s long-term fiscal house will remain in a state of disorder, threatening future prosperity for our children and grandchildren.