The number really is shocking: $31.4 trillion — with a “t.” That’s the current debt ceiling for the U.S. government. With the COVID-19 emergency now officially over and the nation not at war, there’s no excuse for raising it even higher unless budget reforms are enacted to bring it down, pronto.
According to the nonpartisan Congressional Budget Office, the projected 2023 deficit is $1.4 trillion, or 5.3% of GDP, but it could grow to 6.9% by 2033.
The rate of growth of the federal debt has likewise been significant and is expected to only get worse. Federal debt held by the public is projected to rise from 98% of GDP in 2023 to 118% in 2033 — an average increase of 2 percentage points per year,” the CBO explained. “Over that period, the growth of interest costs and mandatory spending outpaces the growth of revenues and the economy, driving up debt. Those factors persist beyond 2033, pushing federal debt higher still, to 195% of GDP in 2053.”
With rising debt and rising interest payments on that debt comes a slower economy, as money that could’ve gone toward more productive uses ends up going down the drain.
That’s the reality behind the desire of President Biden and Democrats in Congress to raise the debt ceiling even higher to avoid the government defaulting on its obligations on June 1. House Speaker Kevin McCarthy, who met with Biden at the White House Tuesday afternoon, and his Republican majority are insisting on major cuts.
According to The New York Times, the budget bill the GOP House passed in April would cut spending 14% over the next decade, as well as cut some of Biden’s new social and climate programs.
Tuesday afternoon Axios reported a group of moderate Democrats are trying to encourage McCarthy to work out a compromise with the White House with a promise to support him from being ousted by his own party from the speakership. But McCarthy spokesperson Mark Bednar told the news site, “The speaker has never heard of this garbage.”
It makes for good fundraising letters and text messages on both sides. But this is part of the disco dance leading up to an inevitable compromise.
“The responsible choice is to raise the debt ceiling along with fiscal reforms,” Romina Boccia, director of budget and entitlement policy at the Cato Institute, told us. “The GOP proposal is quite modest, with spending caps and using unspent COVID relief funds. Other than that, it’s just a Band-Aid on a wound otherwise gushing deficits.”
This seems reasonable to us. With COVID now officially over, no war and unemployment low, there’s no reason to increase spending on new programs. After the wild deficits of recent years — $2.6 trillion in 2021 and $1.4 trillion in 2022 — this ought to be a time of paying down debt, or at least not raising it excessively. We urge Southern California members of Congress to act prudently.
