American children born today are getting a raw deal. As they come of age to drive or vote, they will be saddled with unimaginable levels of public debt because of the decisions their political leaders are making today.
I know this because the official keepers of the budget accounts for Congress — the Congressional Budget Office (CBO) — told us in vivid detail that public debts will swell, and a recent study shows this debt will overwhelm and constrain the future generations’ ability to make investment decisions available to current decision-makers and respond to unforeseen crises.
{mosads}Recent policy choices unfortunately have constrained the ability of future generations to deal with unanticipated problems in their era. Reversing this problem will be difficult, but, as history has shown, it will come from a return to Democratic vision and leadership.
Under the latest analysis by Congress’ non-partisan CBO, the federal government will take in about $1 trillion less in taxes and other revenue than it spends every year for the foreseeable future. That annual gap, known as the deficit, accumulates as our federal debt.
The recent Tax Cuts and Jobs Act, which CBO says will cost almost $2 trillion over 10 years, mostly by cutting taxes for the very wealthiest, adds to the deficit and debt levels.
The current federal debt is about three-quarters the size of the economy and growing — it will be nearly equal to the size of the economy in 10 years. Not since the aftermath of World War II has the debt been that high.
But a recent analysis published by the Progressive Policy Institute (PPI) shows a more tangible impact that this debt level will have on those born today.
The new analysis points out that in as little as seven years, the federal government could spend twice as much on interest on the national debt (payments to bondholders for the debt that has already occurred) as it would on all public investments in education, infrastructure and scientific research combined.
In other words, the decisions policymakers are making now will result in those born today being less able to invest as they see fit in the future. They’ll also be ill-equipped to respond to unforeseen wars, disasters or other crises if and when they occur.
It does not have to be this way. During President Bill Clinton’s term, the federal budget went from deficit to surplus. Sadly, that surplus was lost and the deficit exploded during President George W. Bush’s term as a result of the policy decision to not pay for the cost of two tax cuts and two wars.
That deficit continued into the first years of President Barack Obama’s term, arising from the Great Recession and the country’s response to it.
The deficit shrank by about two-thirds under President Obama but is now growing again under President Trump and is forecast to grow to a permanent $1 trillion per year. That problem will only worsen as the country continues to age and as health-care costs continue to grow at a faster rate than the economy.
While neither party is entirely free of blame, the fact is leadership under recent Democratic presidents has reduced the deficit and therefore given flexibility to subsequent leaders.
One part of any fiscal discussion should remember the responsibility to future generations that previous Democratic presidents have shown and that the ongoing debates about federal budgets, taxes and spending are not just about numbers. These are debates about the world we want to turn over to our kids.
Brodi Fontenot is a senior policy fellow at the Progressive Policy Institute, CEO of Fontenot Strategic Consulting LLC and an adjunct professor at American University. He was assistant secretary of management and nominated as chief financial officer at the U.S. Treasury Department and assistant secretary of administration at the U.S. Department of Transportation under President Obama.