Earlier this year, the Congressional Budget Office published an estimate that sent shivers down the spines of fiscal hawks throughout the country. According to the report, the federal government’s budget deficit would pass $1 trillion in 2020, a result of the usual overspending by Washington as well as the Trump administration’s tax cuts. Total debt, already as high as the great Rocky Mountains, would increase by 43% over the next 10 years, reaching $31 trillion in 2030.
And then, two months later, the coronavirus pandemic hit like a brick to the head — shutting down the U.S. economy, quarantining hundreds of millions of people into their homes, forcing an additional 21 million people on the unemployment rolls in just four weeks, and compelling lawmakers to jet to Washington to sign three separate spending bills to keep the economy above water.
Facing the worst economic contraction since the Great Depression, Republicans and Democrats alike chose to put principle and ideology aside to pass three pieces of legislation totaling $2.6 trillion — just under half of what the Trump administration requested for its total FY2021 budget. All of that cash is essentially borrowed, which means deficits could rise to a level the country hasn’t witnessed since the immediate aftermath of World War II. The Committee for a Responsible Federal Budget assesses that the total U.S. debt will grow as much over the next seven months as it did during the three-year-long Great Recession.
In today’s Washington, no politician wants to talk about deficits. Deficit hawks such as Republican Sen. Pat Toomey of Pennsylvania understated it when he told the New York Times that “it hasn’t been a prominent topic of conversation.” Even the most committed fiscal conservative realizes that now is not the time to hammer the message home.
The country is undergoing one of the most economically distressing periods in its history. Small businesses are at risk of going under. Individual state and city governments are losing massive amounts of revenue, with New York City set to confront a $10 billion hole in revenue over the short-term. People are seeing their livelihoods disappear. It is abundantly obvious that Congress and the White House had to do something to alleviate the financial stress people are feeling — and they needed to do it quickly.
Indeed, one only needs to look at how quickly the $349 billion Paycheck Protection Program for small businesses dried out to understand the urgency of the situation. Congress is preparing this week to add an additional $300 billion to the fund, plus $75 billion for hospitals and $25 billion for coronavirus testing. None of this deficit spending will be paid for, and yet lawmakers don’t really have a choice but to add onto the heap of debt that already exists. To sit back and do nothing would be a dereliction of duty and cost them their jobs in November.
Even so, it’s incredibly unfortunate that Washington put itself in this position. As the saying goes, in order to prepare for a storm, you fix your roof when the sun is beaming above. But time and again, Congress has chosen to use the sunny days to let the house’s foundations wither. In this case, withering means passing budget deals every two years that add hundreds of billions of dollars in discretionary spending to keep everybody happy. Over time, the bill adds up.
There will come a point in the future when the United States will no longer be able to carry the debt burden on its shoulders. The decades of sacrificing the prosperity of future generations to deal with the present is going to smack this country in the face as hard as the coronavirus. When it finally happens, future lawmakers sitting in their offices are going to have to accept painful choices to deal with the fallout, all the while looking back and wondering why their predecessors didn’t take the financial solvency and credibility of this nation as seriously as they should have.
Daniel DePetris (@DanDePetris) is a contributor to the Washington Examiner’s Beltway Confidential blog. His opinions are his own.
