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Mounting Debt

Posted By Ann Sullivan, Wednesday, April 3, 2019
Recently, I heard Congressman Chip Roy from Texas state that the U.S. accumulates $100 million in debt every hour. That is a staggering, unsustainable number. It begs the question – is anyone in Congress concerned about this mounting debt, given that it is budget season? Does anyone care?

AnnSullivan According to the former Treasury Secretary Robert Rubin, “Despite rising debt, interest rates have remained low, and a fiscal crisis has not occurred. That is because private demand for business investment has been sluggish in a slow recovery, the Federal Reserve has provided liquidity through its unconventional monetary policy, and financial markets often ignore unsustainable fiscal conditions for an extended time.” He goes on to say: “Now, the imperative must be to develop a political strategy, and, in that context, a narrative, that persuades the broad American public that its economic well-being depends on getting our fiscal house in order.”

Given the absence of a financial crisis, elected officials have not convinced the American public that mounting debt, even to the tune of $100 million an hour, requires action. The place where fiscal policy starts is the Senate and House Budget Committees. Since the Senate Budget Committee just passed their FY2020 budget resolution, it is instructive to note the positioning of both sides. The Republican-controlled Senate Committee lauded the plan as cutting half a trillion dollars in deficits and debt over the next five years. According to the Chair, Senator Mike Enzi (R-WY), the Senate Resolution does not increase budget caps put into place in 2011 by the Budget Control Act, thus limiting spending.

In contrast, the top Senate Democrat on the Committee, Senator Bernie Sanders (I-VT), said this: “The Senate Republican Budget is immoral and bad economic policy. In almost every instance this budget ignores the needs of ordinary Americans and what the American people want, while at the same time protecting the interests of the wealthiest and most powerful people in this country – many of whom are the largest GOP campaign contributors. This is a budget that moves this country rapidly in the direction of oligarchy. It constitutes a massive transfer of wealth from the working class to the billionaire class.”

The House Budget Committee, controlled by Democrats since January, has not yet announced its deliberation schedule on the FY2020 budget. However, there appears to be disagreement on the levels on non-defense spending among Democrats. The Chair, Representative John Yarmuth (D-KY), is pressing to lift the spending caps imposed in 2011, allowing the Congress to spend more money without requiring spending cuts to offset the decreases.

So much for a political strategy. And frankly, so much for public engagement. While some in Congress have sounded the alarm, there appears to be little appetite for making hard choices necessary to reduce the debt.

Meanwhile, while I have been writing this article, the debt just went up another $100 million. Reduction of the debt falls into the same bucket many other issues facing our country drop into—solving problems only when a crisis demands it. Short of a voter groundswell, the debt will keep piling up. You should know where your Congressional delegation stands on this important issue. Are they concerned? Have they proposed any solutions to reducing the debt? Or are they waiting for a financial crisis to force the issue?

It seems to me that asking elected officials for big solutions is a reasonable request. Answers won’t be formulated unless the voters demand it.

Tags:  Advocacy  budget  Treasury 

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