The Government Accountability Office has once again warned Congress that the federal government’s current fiscal trajectory is “unsustainable.”
In a report submitted to Congress on June 21, the GAO notes the federal deficit has continued to grow every year in the last few years. In fiscal year 2015, the federal deficit was $439 billion, in fiscal year 2016 it was $587 billion and in fiscal year 2017 it was $666 billion.
While federal receipts were noted by the CBO to have increased $48 billion in the 2017 fiscal year, such increases were “outweighed by a $127 billion increase in spending, driven by Social Security, Medicare, and Medicaid, and interest on debt held by the public.”
Interest on the national debt, Social Security and Medicare spending have been projected by both the GAO and the Congressional Budget Office to continue to be the biggest drivers of government spending moving forward.
The GAO report cites projections by the CBO that “increased costs in Medicare, Social Security, and net interest will account for more than two-thirds of the approximately $3 trillion increase in total federal spending over the next 10 years.”
The aging population is sure to continue driving higher health-care-related spending for some time, absent policy changes of the sort Congress has yet to show any appetite for.
Meanwhile, the national debt, and the cost of interest on the debt, will continue to bloat and therefore further constrain future policymakers. The GAO notes that growing debt and rising interest rates will increase the cost of interest payments on the national debt.
Practically, the GAO cites CBO estimates that net interest costs in 2018 will be $316 billion. If nothing is done to alter this trajectory, it is projected that by 2028 the federal government “will spend more on net interest than it will spend on either defense or nondefense discretionary outlays.” And by 2046, net interest costs alone will rise to 21.6 percent of total federal spending under one of the GAO’s projections.
“These policymakers face a federal government highly leveraged in debt by historical norms and on an unsustainable long-term fiscal path caused by a structural imbalance between revenue and spending, absent a change in fiscal policy,” the GAO wrote in a letter accompany the report.
Will Congress do anything about it? There’s no reason to believe so.
On June 20, the Senate couldn’t even trim $15 billion in spending authority, with two Republicans joining the Democrats in voting down the “rescission” package. Only about $1.1 billion in savings would’ve actually been realized, but that was apparently too difficult for the Senate.
As is often the case, Sen. Rand Paul, R-Kentucky, said what needed to be said on this failure of the Senate to exercise a minute amount of responsibility. “Our $21 trillion debt poses the greatest danger to our national security and is only getting worse by the minute,” said Paul after the vote. “It is time for Congress to grow up and acknowledge that government won’t be able to do anyone any good or fund any politician’s priority when it goes broke.”