Last week, Congress finally settled federal government spending for this fiscal year...seven months into it. Now, it already finds itself behind in addressing the budget for the coming year.
Lawmakers blew past the April 15 deadline to agree on a budget resolution and work has yet to begin on the 12 spending bills needed to fund the government. Some are already voicing fears of a possible government shutdown in October when the new fiscal year begins. This is not how the process is supposed to work.
However, what is even more troubling is that all the time and effort is being spent on a small and diminishing share of the budget. We point this out in a new commentary in Medium.
Washington’s budget follies are well known. However, very few realize that the vast majority of government spending is not even covered by this process. That has serious consequences for the national debt.
For all the difficulty the process causes and the time it consumes, the government spending involved, which includes the various departments and alphabet soup of federal agencies, represents less than one-third of the overall federal budget. The rest goes to spending that is essentially on autopilot because it does not need annual approval. This includes Social Security, Medicare, Medicaid, and interest payments on the debt.
More importantly, autopilot spending will account for most of the growth in overall spending in the years to come. The aging population and rising health care costs will cause Social Security, Medicare, and Medicaid to skyrocket. Rising interest rates and growing national debt will make interest on the debt the fastest growing part of the budget. We cannot fix the debt if we continue to ignore this spending.
We also note that the other side of the budget equation – revenue – must also be addressed. That is best done through comprehensive tax reform.
We conclude by urging Washington to stop wasting so much energy on what should be a basic task and concentrate more on addressing what is causing the national debt to spiral out of control.
Washington needs to get its act together and agree on a budget and funding for the government in a timely manner because it needs to devote more time to what is really causing the national debt to grow towards unprecedented levels. Delaying short-term commitments and disregarding the long-term challenges will make growing the economy in a sustainable way much more difficult.
We need less drama and more decisive action to put the country on the right track.
National Debt and You