Budget group decries Washington's 'debt denialism'

Budget group decries Washington's 'debt denialism'

Budget watchdogs are raising the alarm about “debt denialism” amid a soaring national debt.

The national debt has spiked by more than 10 percent since President TrumpDonald John TrumpTrump says 'Failing New York Times' should be held 'fully accountable' over Russia report Trump says 'Failing New York Times' should be held 'fully accountable' over Russia report Trump tweets ICE will begin removing 'millions' of undocumented migrants MORE took office and as Congress passed a tax-cut law and new spending bills that have added to annual deficits.

The debt surpassed $22 trillion in February, and the Treasury Department forecasts an annual deficit of more than $1 trillion this year.

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“The last two years have been defined by massive, unpaid-for tax cuts and spending increases, with little attention to addressing near- or long-term fiscal imbalances,” the Committee for a Responsible Federal Budget (CRFB), a nonpartisan group advocating fiscal restraint, wrote in a paper released Tuesday.

The group criticized partisans on both sides for ignoring the issue.

“Commenters on the left and right are increasingly urging Washington to ignore mounting debt levels and instead focus on enacting new costly initiatives while protecting special interest tax breaks and spending programs,” the group’s paper stated.

Trump wants to increase defense spending by billions of dollars in this year’s budget while cutting nondefense programs. His proposed budget failed to balance within a decade, even as it relied on unusually optimistic economic assumptions to meet its forecasts. 

Republicans have argued the tax-cut law signed by Trump last year will pay for itself, a conclusion at odds with mainstream economists and nonpartisan professional forecasters.

House Democrats, for their part, want to increase domestic discretionary spending and have proposed a ceiling for that spending that is twice that for defense spending.

Like other fiscal watchdogs, the CRFB argues that demographic changes will only make matters worse.

“This new debt denialism could not come at a worse time. The rapid aging of the population means that deficits and debt are on course to explode in the coming decades,” the group wrote. 

The higher debt has increased the amount of federal dollars earmarked to pay down interest, which may soon cost more than annual defense spending. CFPB projects that at current rates, interest will become the largest spending category by 2050.

The debt may also “crowd out” investment from the private sector as investors buy government bonds instead of investing in the private sector, which can constrain economic growth.

The CRFB paper concluded that “rising debt will reduce income per person by $6,000, or 6 percent, compared to if debt were falling relative to the economy” by 2048.