The
United States government has a debt problem. Last year, we had a big
fight in Washington over how to deal with that. It wasn’t a productive
debate. It did not end in a long-term solution.
There
hasn’t been quite as much talk about the budget in Washington, but the
dirty dishes of debt keep piling up. Arguing and shutting down the
government won’t fix the problem. It’s going
to require compromise to get a solution, courage to pass legislation
and then perseverance to make sure it is held to.
First,
let’s look at the problem again. Right now, our national debt is over
$17.7 trillion, an increase of $7 trillion from 2008. By the end of this
year, federal debt held by the public will
reach 74 percent of our annual GDP. The Congressional Budget Office
estimates that it will climb to 111 percent by 2039. That would be
unsustainable.
Those
are big numbers, but they have a real impact. Last year, we paid $221
billion in interest on the debt. In ten years, annual interest rates
could quadruple. Wouldn’t we rather spend those
billions of dollars on something worthwhile? Money spent on interest
doesn’t help anyone and hurts our economy and job growth.
The
reality is that debt payments will be growing at the exact same time
that important programs like Medicare and Social Security will be facing
funding crises. Every dollar spent on keeping
our creditors at bay is a dollar less for critical medical care and
support for older Americans.
The
trust fund for Medicare’s hospital insurance program will be depleted
by 2030. That means that if we do nothing, hospitals could get a 15
percent cut to reimbursements in a single year.
Inevitably, it would make getting care at a hospital more expensive and
more difficult.
The
Social Security trust fund is currently projected to be depleted just
three years later. By current law, there would be an instant 20 percent
cut to payments to seniors. Imagine trying
to shop or pay the bills with that much cut out of your budget? That
could be what millions of seniors are facing in less than 20 years.
The
best way to tackle debt is economic growth, but that’s been a problem
here in the United States also. Since the economic downturn, annual
growth has only been at 1.1 percent and even the
optimistic projection of the Congressional Budget Office says that over
the next ten years it could average 2.5 percent. That is just barely
enough to create jobs for the millions of Americans entering the
marketplace every year.
It’s
not that Americans aren’t paying a lot of taxes. In fact, the federal
government has been collecting record amounts of revenue in the past few
years. Government spending, however, is up.
Federal spending averaged around 20 percent of the economy for much of
the past 40 years. But now for the last four years, that has increased
to 22.8 percent. Small numbers here make a big difference, especially
since government revenue as a percentage of
the economy is basically unchanged. Spending has grown tremendously,
tax revenue has not.
Last
year, after fighting to the point where Democrats and Republicans
couldn’t keep the government open, we effectively declared a truce and
passed a budget agreement for 2014 and 2015. I
supported this agreement, knowing that more argument wasn’t going to
solve the problem.
We’ve
had relative budget peace in Washington this year, but the problem is
far from solved. This is not an easy problem to solve, and it is going
to require a far more civil discourse then
we saw in 2013.
U.S. Rep. Joe Pitts is a Republican who represents Pennsylvania's 16th Congressional District.
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