If we needed any reminder that the national debt is a serious problem that needs fixing, we got several this week. Here’s a quick recap of the recent developments and what they mean.
Our co-chairs called for a new commission. With gross national debt near $20 trillion, Fix the Debt Co-Chairs Ed Rendell and Judd Gregg called for a new bipartisan commission with the authority to have its deficit reduction proposals voted on by Congress. Read the op-ed.
Interest rates raised. The Federal Reserve raised a key interest rate on Wednesday and signaled more rate hikes are likely this year. Rising interest rates will make it more expensive to finance the growing debt. Interest payments on the debt will be the fastest growing part of the budget, crowding out critical investments like education and infrastructure. See our infographic.
The debt limit is back. The debt limit was reinstated Thursday. The Treasury Department is using “extraordinary measures” to avoid going over the limit until the fall. Until we fix the debt, Washington will continue to play games with the debt ceiling that threaten the nation’s credit. See our primer.
Health care heated up. Debate over new health care legislation escalated over costs and coverage. Any health care changes should not add to the debt, should extend the solvency of Medicare, and focus on controlling the growth of health care costs, which will account for much of the expected increase in government spending. See more on addressing health care and other ways to fix the debt.
Skinny budget released. President Trump released an outline of his budget request for the next fiscal year today. The so-called “skinny budget” calls for a $54 billion increase in defense spending, paid for with non-defense cuts in areas such as the Environmental Protection Agency, National Institutes of Health, and State Department. But it does nothing to address the autopilot spending that will drive most of the growth of the debt. See our brief.
A more detailed budget will come from the White House later this year and Congress will soon consider budget proposals. Our leaders in Washington must hear from us that they need to fix the debt. Send a letter to Congress. And send a letter to President Trump.