WASHINGTON, March 11, 2016 /PRNewswire-USNewswire/ -- With voters going to the polls in several key primary and caucus states on March 15, The Concord Coalition reminded all candidates today that regardless of party affiliation or ideology the rising national debt will affect the feasibility of their policy proposals.
"The debt is your running mate," said Concord Co-Chairs Bob Kerrey (D-NE) and Jack Danforth (R-MO) former U.S. senators, and John Tanner (D-TN) and Mike Castle (R-DE), former U.S. House of Representatives members.
Their full statement:
Our nation's budget policies simply don't add up. And judging by what the leading 2016 presidential candidates are promising on the campaign trail, this sobering fact has not sunk in.
Republicans are proposing major tax cuts and higher defense spending. Their proposed spending cuts are nowhere near as large or specific. Democrats are proposing an array of expanded domestic programs that even if paid for with higher taxes would leave large and growing deficits.
This may seem like good campaign rhetoric, but it calls for a hard reality check. Whoever is elected president in 2016 will face a deep fiscal hole.
Failure by the new president and the next Congress to take quick and effective action on this fundamental problem could hurt the economy, lower American living standards, strangle investments on national priorities like infrastructure and medical research, leave critical entitlement programs on unsustainable paths, and put our position of global leadership at risk.
Even more shameful, we would be passing on the unfair burden of an enormous government debt to our children, grandchildren and future generations.
Projections by the Congressional Budget Office (CBO), based on current law, demonstrate that the government is in an increasingly difficult position:
- The budget deficit is projected to begin rising this year reaching $1 trillion (4.4 percent of GDP) by 2022 at the end of the next president's first term.
- Debt held by the public is projected to grow from 76 percent of GDP this year to 86 percent over the coming decade, far above the 39 percent average for the past half-century.
- According to CBO, "Beyond the coming decade, the fiscal outlook is significantly more worrisome," with debt rising further to 155 percent of GDP by 2046.
Population aging and rising health care costs mean that spending growth on the major entitlement programs is outpacing revenue growth, squeezing out other programs and adding to the debt. Under current law:
- The CBO projects that most of the spending growth over the next 10 years will be driven by major health care programs (32 percent of the increase), Social Security (28 percent of the increase), and interest on the debt (23 percent of the increase).
- Mandatory spending -- which grows on autopilot and includes the major entitlement programs -- along with interest on the debt will consume 99 percent of all revenues by 2026.
- The projected rise in interest payments on the debt, from $255 billion in 2016 to $830 billion in 2026, is attributable to growing government borrowing and interest rates gradually increasing to more typical levels.
- Social Security and Medicare continue to pay out more than they take in from their designated revenues, putting a growing strain on general revenues. The programs' trustees warn that, "Social Security as a whole as well as Medicare cannot sustain projected long-run program costs under currently scheduled financing."
Owing in large part to tight caps agreed to in the Budget Control Act of 2011, discretionary spending -- which includes defense, education, transportation, justice, environment and certain veterans' benefits – will actually decline from 6.5 percent of GDP in 2016 to 5.2 percent in 2026. By that year, discretionary spending and the deficit will both amount to roughly $1.4 trillion.
That means that cutting "waste, fraud and abuse," as so many candidates advocate, is not the answer; Congress would have to eliminate all discretionary spending to balance the budget that year (assuming there were no entitlement cuts or tax increases).
The next President and Congress will not have the luxury of putting off the hard choices. Voters must ask some tough questions about the totality of the candidates' fiscal plans and whether they add up. Candidates must do more than rail against the debt; they must give voters credible plans to rein it in and put the country's finances on a sustainable path.
So our message to the candidates is this: The debt is your running mate. It will be there when this year's winning candidate takes the Oath of Office. Your campaign promises need to reflect that reality. So far, they don't.
The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility. Since 1992, Concord has worked to educate the public about the causes and consequences of the federal deficit and debt, and to develop realistic solutions for sustainable budgets. For more fiscal news and analysis, visit concordcoalition.org and follow us on Twitter: @ConcordC
SOURCE The Concord Coalition