This week on Facing the Future, host Bob Bixby spoke with Tom Kahn, the longest-serving House Budget Committee staff director in history and current Director of American University’s Center for Congressional and Presidential Studies. Their conversation delved into the chaotic federal budget process, the erosion of congressional spending power, and the challenges facing the United States amid mounting debt and deficits.
Kahn began by highlighting the disarray in the current budget process, emphasizing how polarization and leadership control had distorted a system originally designed for careful deliberation. A prominent example is how the fast track “reconciliation” process, which can be used to get around a Senate filibuster, has been transformed into a fast track for increasing budget deficits. “Reconciliation should really be designed to reduce the deficit. That’s the way it was used in the late 80s, certainly in the 90s,” Kahn emphasized. “Now we’re in a world in which reconciliation is simply used as a vehicle to pass big spending bills or tax cuts that actually add to the deficit.”
This is happening, Kahn pointed out, at a time when a strong budget process is needed to deal with widening fiscal challenges. “We have a debt and deficit that is absolutely unsustainable right now. We are in uncharted waters, and we need a budget process that is going to be able to put priorities in place and figure out how we can get our hands around this debt.”
“We cannot keep adding more and more debt,” he added, “borrowing more and more and more, and somehow expect there will be no consequences for it. We’ve gotten away with it so far, but we are leaving one hell of a legacy for our kids, and we don’t know when the slow bankruptcy is going to come fast. But when it becomes fast, it’s going to come really fast, and then the solutions are going to be so much more painful, and so much more difficult for us to get out of it. Our policymakers are unwilling to deal with it for several reasons, and one of them is that fixing it requires you to make tough decisions. You’re going to have to raise taxes. And you’re going to have to cut spending, and no politician wants to do either.”
Kahn also addressed the growing problem of executive overreach in spending decisions, tracing a troubling trend where presidents have increasingly asserted unilateral authority over appropriated funds. He stressed the importance of Congress reclaiming its constitutional authority over the purse strings, invoking James Madison’s words from the Federalist Papers: “The power of the purse may be regarded as the most complete and effectual weapon with which any constitution can arm the representatives of the people.”
Reflecting on the broader fiscal challenges, Kahn painted a stark picture of the nation’s debt trajectory and its consequences. “We have a debt as a percentage of GDP closest to the largest it’s been in American history,” he said, warning that debt service—the interest on the debt—was the fastest-growing part of the budget and already cost the government about $1 trillion per year. “It is a complete waste of money in the sense that it doesn’t build a single school, it doesn’t build a single tank, it doesn’t pay for a single school lunch program,” Kahn said.
He also described the economic repercussions of rising debt, including higher interest rates, inflation, and slower growth, and cautioned that eventual debt repayment would require painful fiscal decisions.
Kahn offered some proposals for reforming the budget process. He suggested instituting an unwaivable rule that reconciliation could only be used to cut the deficit and debt, requiring budget resolutions to detail the long-term consequences of additional debt, and establishing a bipartisan fiscal commission with the power to present deficit reduction plans subject to an up-or-down vote in Congress.
When discussing the younger generation’s awareness of these fiscal challenges, Kahn admitted that most students seemed disengaged or unaware of the stakes. “Very few students are aware or think about the debt or deficits. In their mind, it does not affect them very directly.”
“Every class I teach I go through, laboriously, the growth of the deficits, the growth of the debt, the dangers, in terms of higher interest rates, higher inflation, lower growth, and the consequences if the debt keeps growing. And I even joke that my generation had a big party, and you guys are gonna have to pay for it.”
Kahn, broadened this observation to the American public in general, saying “I don’t think deficits and debt are on the radar screen of enough Americans. I don’t think people are aware of the facts, and I think we all have a responsibility to try, as I do with my students, to teach them what the stakes are, and what are the consequences if no action is taken.”
“It’s still not too late to address the deficit and debt, but it will be too late once we truly hit a debt crisis. Because once we truly hit a debt crisis, when the stock market crashes, when interest rates go through the roof, when unemployment goes way up. And then we’re being told, you’re going to have to cut spending and raise taxes, you’re in the middle of an economic crisis. That is the worst time to do anything like that.”
He emphasized the need for ongoing education and praised organizations like The Concord Coalition for their work educating young people about the budget and fiscal responsibility.
“Hopefully, we’ll have the wherewithal to take action before a crisis takes place,” he said.
