Government debt will grow faster than the official government estimates suggest, a political group linked to the Koch brothers argues in a new analysis published Tuesday.
Freedom Partners, a group that advocates free-market policies and has been linked to the billionaire brothers who run Koch Industries, estimated that the gross federal debt will be nearly a quarter higher in 2040 than the Congressional Budget Office estimated earlier Tuesday.
Whereas the budget office, Congress’ official agency for budget analysis, sees the federal debt rising to 122 percent of economic output by then, Freedom Partners calculated that the gross federal debt, a different measure, would rise to 151 percent.
The difference, the group said, is that the budget office considers only debt held by the public and not debt owed by the government to itself, largely through the Social Security and Medicare trust funds.
“Not only are we heading toward a situation with a record level of federal debt, but we believe that failing to account for intragovernmental debt, the numbers are actually a lot worse,” said Andy Koenig, a senior policy adviser for the group.
The Freedom Partners analysis involves making assumptions about how federal policymakers might respond to the impending exhaustion of the Social Security combined trust funds in 2029 or the Medicare hospital insurance trust fund in 2026.
If the trust funds were to be exhausted, Social Security and Medicare would face immediate cuts. But the Congressional Budget Office, under law, is required to assume that payments would continue to be made and that the government instead would issue more debt to pay for them.
In its analysis, Freedom Partners adopts the assumptions that the CBO makes regarding the trust funds in a separate analysis that extends out past 2026 and extends them even futher, effectively assuming that Congress will not allow automatic spending cuts to Social Security and Medicare or for the trust funds to be completely exhausted.
