Debt and interest payments are consuming historically huge portions of the federal budget, and President Donald Trump and Congress cannot afford to ignore the problem, National Taxpayers Union President Pete Sepp said Friday.
Federal deficits will grow from 101% of the economy at $1.9 trillion this year to roughly 120% or $3.1 trillion by 2036, according to the latest 10-year outlook from the Congressional Budget Office.
Because of that, interest payments on the national debt will continue to swell, consuming an ever-larger share of federal tax dollars.
The result for the American people will be higher interest rates as debt crowds out private investment. Further impacts include dramatically increased costs for past government spending, and drastic austerity measures on social services like Medicare, Social Security, and Medicaid.
“Paying for past borrowing is already increasing the cost of living for Americans today,” Sepp said. “The problem compounds by the day. Congress and the President must act to address these structural spending problems before mid-term elections this year.”
A recent poll conducted by Public Opinion Strategies in partnership with NTU found that 89% of registered voters believe the U.S. is facing an affordability crisis, while 88% say the $37 trillion national debt will eventually have a real impact on them and their families. When asked how best to reduce the debt, 54% pointed to cutting government spending.
“Americans await leadership to identify real and salient solutions to these spending problems,” Sepp said. “They know we cannot afford to keep racking up debt on the nation’s credit card while making interest-only payments anymore.”
The CBO outlook also shows demographic pressures intensifying as Baby Boomers age and the number of Social Security recipients rises substantially, accelerating alongside health care spending. Meanwhile, economic growth is projected to remain modest.
“The challenge is not temporary spending spikes or short-term economic conditions,” Sepp said. “The yawning mismatch between long-term commitments and the resources available to finance them grows wider every year. The time to act is now.”
National Taxpayers Union is the only free-market organization for taxpayers that unites effective advocacy with useful research about how to limit taxes, spending, and regulation at every level and branch of government—state, federal, administrative, and judicial.