Agreement on a deal within Congress last week to, in part, suspend the federal debt limit (the agreement was signed by President Obama on Monday) was, for the country, both necessary and painful.
Necessary because reaching the nation's borrowing authority and not increasing the debt ceiling would have resulted in the country running out of money to meet its obligations. The new agreement suspended the debt ceiling until March 15, 2017, when a new president and new Congress will be in place.
Painful because it means more federal red ink. Today, the federal debt totals more than $18 trillion (debt represents about 74 percent of the nation's GDP).
Consider these additional numbers provided by First Budget, a nonpartisan initiative of the Concord Coalition and Campaign to Fix the Debt formed to raise awareness of dangers posed by federal debt and making solving the debt problem a priority for presidential candidates.
- Federal debt will rise to some $21 trillion by 2025.
- Spending on retirement and health care programs, and interest on the debt, will rise to 67 percent of total federal spending by 2025.
- Interest on the debt is the fastest growing category of federal spending. In 2017, the nation will spend $304 billion on interest payments; by 2025, $750 billion.
Clearly, a future of more deficits and rising debt isn't sustainable. Fiscally speaking, rising debt eventually will crush the nation.
"If we continue down this path," according to First Budget, "an increasing portion of the federal budget will go to financing today’s spending and yesterday’s promises, rather than toward the next generation. High debt levels crowd out productive investments in people, education, machinery, technology and research, resulting in fewer job opportunities and lower wages. Failure to take action now carries the risk of rising interest costs, a hollowed out national defense, inability to deal with new challenges, slower economic growth and a lower standard of living."
As presidential candidates visit Iowa over the next three months ahead of the state's first-in-the-nation caucuses and as U.S. House and Senate candidates hit the campaign trail in Iowa, Nebraska and South Dakota next year, we encourage voters to ask them hard questions about their position on the nation's debt problem. If they propose new spending plans, demand to know how they will pay for their proposals.
What's happening in Washington isn't responsible budgeting practice for American families. It shouldn't be acceptable for our federal government, either.