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Bipartisan group pushes debt debate as annual interest approaches $1 trillion
If you’re financially managing a household, you likely already know that once those low, introductory credit-card interest rates expire, and high, double-digit interest kicks in, minimum monthly payments are merely servicing debt and reducing your ability to pay for groceries, school supplies, doctor bills and other critical expenses.
Most lawmakers from both political parties don’t quite seem to grasp that concept, according to a bipartisan, nonprofit group focused on elevating the issue of skyrocketing federal debt in the current presidential and congressional races that will be decided on Nov. 5.
According to the Committee for a Responsible Federal Budget (CRFB), the annual interest on the federal government’s more than $35 trillion debt is nearly $900 billion. To put that in perspective, the United States spent $820 billion on defense in 2023 and $832 billion on Medicare.
“That’s the stat that resonates most as we are trying to make this case inside the beltway to members of Congress and policymakers,” CRFB Senior Vice President and Chief of Staff Mike Murphy said in a phone interview. “Because the debt stuff is a little abstract, trying to figure out how it impacts things, but when you hear that we’re paying more on interest than we’re paying for defense, more on interest than on Medicare, that tells you that you’re in some serious trouble.”
CRFB’s board includes former members of Congress, former Secretary of Defense, CIA Director and Director of the Office of Management and Budget Leon Panetta, former Ohio Gov. John Kasich and former White House Chief of Staff and Director of the Small Business Administration Erskine Bowles, among many others.
Colorado U.S. Sen. Michael Bennet, who isn’t up for reelection this cycle, is very focused on the issue but hasn’t been able to get enough of his colleagues to come along for the ride.
“Sen. Bennet believes Republicans and Democrats must work together to put our nation’s fiscal house in order,” Bennet Deputy Press Secretary Patrick Barham Quesada wrote in an email. “He knows we can’t keep borrowing against our children’s futures by cutting taxes for the wealthiest Americans while we watch our national debt explode. That’s why he’s championed legislation to reduce the federal deficit, make wealthy taxpayers pay what they owe, and proposed comprehensive fixes to Washington’s broken budgeting process.”
In 2018, Bennet made reforming the budget and appropriations process a top priority, spearheading the comprehensive “Fiscal Reform Act”, which did not pass. Asked if the legislation has been reintroduced more recently, Quesada said no but it’s still top of mind.
“We have not reintroduced recently but remain engaged in bipartisan conversations on reforming our budgetary process and ensuring we tackle our unsustainable debt and deficit levels,” Quesada replied.
“The last time we ran a budget surplus — when the government brought in more in taxes than it spent on programs —was in 2001, when the national debt stood at 32% of GDP [gross domestic product] and was on course to be fully paid off,” CRFB President Maya MacGuineas wrote in a recent CNN column. “But thanks to major tax cuts, spending increases and recession responses — all boosting the debt by roughly the same amount — the debt is approaching 100% of GDP today.”
Neither political party is currently talking about runaway federal debt as it battles for the White House today, Murphy notes. That didn’t always used to be the case.
“In 2000, when [Democrat] Al Gore was running [for president], if you read the language in that party platform, it’s like you’re in a different universe,” Murphy said. “It’s basically, ‘We are committed to balancing the budget every year, and, going forward, we’re going to pay down our debt completely.’ So Democrats have a record on this stuff in the past, and maybe they can do so again.” But thus far CRFB is not hearing much from the Kamala Harris camp on debt reduction.
Similarly, Murphy notes the platform of Republican nominee Donald Trump is largely silent on the issue: “Former President Trump obviously has a record of stating that he cares about these issues, but his actions did worsen the fiscal situation overall when he was in office, and that’s even taking into account COVID [pandemic spending].”
Murphy said politicians on the campaign trail tend to talk about almost everything else besides taxes, spending cuts and commonsense reforms to Social Security to keep it solvent.
“They’ve just kind of kept digging the hole. Our first principle is don’t make it worse; pay for your priorities,” Murphy said, pointing to the Inflation Reduction Act that President Joe Biden’s administration signed into law as emblematic of that principle.
“The Inflation Reduction Act was an example of something that we’ve been advocating more for, which is now because of the hole we’re in, in some ways it’s not enough to simply pay for it, you’ve got to pay for it and then some, which is what the Inflation Reduction Act was originally scored to do,” Murphy said. Time will tell to what degree it reduces the nation’s debt.
Democrats who supported the Inflation Reduction Act and its spending on renewable energy and debt relief paid for by better IRS enforcement and government drug-price negotiations may also want to consider what that nearly $900 billion in annual interest payments costs American kids.
“One of the interest stats that resonates with democratic members of Congress, and they hear about the interest being more than defense and think that’s worrisome, but for a little while now we spend more on interest on the debt than all federal programs that go towards children,” Murphy said.
Finally, Murphy said there’s real urgency in elevating the debt and budget conversation ahead of the next session of Congress.
“They have to deal with another debt ceiling expiration. They’re going to have to deal with the big tax cuts enacted during Trump’s first administration that are going to expire at the end of the year,” Murphy said. “They’re going to have to deal with most likely something involving the appropriations process that they haven’t even finished up for this year yet. We’re probably going to punt it into next year. There’s going to be a lot of budgetary things we have to deal with.”
David O. Williams
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