In a recent guest column, Concord Coalition's New England Regional Director Chase Hagaman explains why elected officials need to work in a bipartisan way to put together a plan to stabilize and begin to reduce the national debt. This piece also appeared online at the New Hampshire Union Leader.
Remember Aesop’s fable, "The Ants and The Grasshopper"? The contrast between an irresponsible grasshopper and a diligent colony of ants illustrates the need to accomplish basic tasks; hard work that can lay the foundation for a successful future.
After watching the ants toil for days, the grasshopper says: “Why bother about winter? We have plenty of food at present.” When winter finally arrived, the grasshopper was starving but the ants were well supplied.
Like the grasshopper, too many elected officials in Washington have let the days, months and years go by without planning for the future. This could result in hardships for current and future generations as the result of a growing national debt and pressure on the federal budget from health care and retirement security programs.
Congress should heed the story’s wisdom and follow the ants’ example by responsibly preparing for the future. That includes paying attention to the warnings in the Social Security and Medicare Trustees’ annual reports released recently, which underscore the need to put these important programs on sustainable paths.
One of the biggest mistakes our nation could make is to think that we can continue to simply borrow to bridge the huge gap between what the government takes in and what it spends. This could jeopardize our economy, lower our living standards, undermine our position of global leadership and saddle younger Americans with excessive government debt.
Congress continues to struggle even with fundamental responsibilities, like approving a dozen spending bills necessary to keep the government running and the unpleasant but unavoidable task of raising the federal debt limit to avoid defaulting on its financial obligations.
Congress has made things even worse by failing to pursue fundamental long-term budget reforms that will put the nation on a sustainable fiscal path.
Under current policy, federal spending will continue to exceed economic growth and tax revenue for decades to come — even as important federal priorities like medical research and environmental protection are squeezed. Two key factors are responsible: the aging of the population and rising health care costs.
Even without taking into account new spending and tax proposals, the government is already on course to add trillions of dollars to the debt in the coming decade, according to the nonpartisan Congressional Budget Office. Future economic downturns, international conflicts or other unforeseen events could, of course, make the debt rise even more quickly.
It is true that budget deficits can be acceptable or even necessary on occasion, such as when the nation experiences a recession. But at a time of sustained economic growth such as the last few years, Congress should be turning its attention toward reining in the federal debt and putting large programs like Social Security and Medicare on sustainable paths.
That has not happened.
The national debt is already quite high by historical standards at 77 percent of the economy (GDP). That is well above its 40 percent historical average over the past 50 years and its highest level since World War II.
Annual budget deficits are projected by the budget office to be more than $1 trillion by 2022. Social Security, Medicare, Medicaid and interest on the debt already consume more than half of the budget, and under current law that figure will continue to grow for years.
Within a decade, we will spend more money servicing the national debt than on our national defense budget.
If left unchanged, Social Security will experience larger cash deficits and require double-digit benefit cuts by 2034.
Rapid cost growth within Social Security and Medicare increases the need for general revenue subsidies for both programs — $311 billion in 2017, reaching $971 billion by 2027. This results in the government paying more each year just to provide the same level of services to more beneficiaries.
Discretionary spending, money that Congress appropriates on an annual basis for defense and domestic programs, will continue to drop beneath its 50-year low as a percentage of GDP.
But there is still time to put the country on a better course if Congress can move past its pattern of excessive partisanship and brinkmanship. Bipartisan organizations have suggested a wide range of options that could help.
Elected officials should be working together, across the aisle, to put together a credible, generationally responsible plan that would eventually stabilize the debt and begin to reduce it. They must also ensure that the nation prepares for the challenges of an aging population, in a way that does not overburden younger Americans and future generations.
Chase Hagaman is the New England regional director for The Concord Coalition, a national nonpartisan organization that advocates for generationally responsible fiscal policy.