By Angelo Lynn
Editor’s note: Angelo Lynn is the editor and publisher of the Addison County Independent, a sister publication of the Mountain Times.
In the battle over raising the nation’s debt ceiling, the public’s understanding of the issue beyond the partisan soundbites is essential if the country is to find a resolution and not sabotage the nation’s economy.
To that end, Rep. Jared Golden, who was recently described as a “pro-choice, pro-gun Democrat from a Trump district in backwoods Maine,” recently sent his constituents an eight-page letter outlining the issue and possible solutions. Golden, who at 40 is a third-term congressman, presents the argument in clear terms.
He starts by recognizing that in a divided Congress compromise is inevitable. Both parties, including President Biden, must be at the table. He also acknowledges that the growing deficits must be reined in. The economic reality, he says, is that running big deficits not only spurs inflation but will in the not-too-distant future wreck the economy.
“Congress has a budgeting problem,” he writes. “The national debt is $31.4 trillion and growing at a pace that will reach $52 trillion in 10 years…. The Congressional budget Office predicts this year’s budget deficit will be $1.4 trillion… and will more than double to $2.85 trillion by 2033.”
He counters the argument that America’s economy can absorb such debt: “America’s debt is almost equal to its Gross Domestic Product (GDP), with a debt-to-GDP ratio of about 98%… Ten years from now, it will be at 118%. According to one estimate, a nation’s economic growth slows by roughly .017% for every percentage point of debt in excess of 77%. Bottom line: America’s debt is increasingly slowing the growth of the economy.”
He further notes that Congress paid more than $475 billion in interest on the public debt last year, and in 10 years, interest on the national debt will be $1.4 trillion. To put that in perspective, Golden explains, Congress spent approximately $1.5 trillion on all discretionary domestic and defense accounts in the past budget. If Congress doesn’t temper those deficits, he says, in 30 years interest on the national debt will be the single largest government expense — more than Social Security, Medicare or defense.
In short, Democrats can’t wish away the issue with the refrain that the middle class, poor and under-advantaged can’t be denied the aid they need.
But neither can Republicans only object to high spending when Democrats are in the White House (spending was rampant for the four years under Trump), refuse to raise taxes on the rich, and propose draconian cuts on spending now that would tank the economy before the 2024 elections. Nor should Republicans pretend to call for blanket budget cuts and then let the opposing party identify the specific programs to be cut (and thus draw the ire of those who would be affected.)
And that’s the rub. While Republicans are calling for proposals to curb the deficit, they have ruled out any way to accomplish it. As columnist Catherine Rampell writes, the plan House Speaker Kevin McCarthy, R-California, proposes would make enormous cuts in spending: discretionary spending would be cut one-third on average in 2024 after adjusting for inflation then expand to roughly 59% by 2033, but the plan doesn’t identify a single program that might be axed or look at the impact any cuts might have.
The U.S. Department on Education, however, took just the impacts on its programs and recently sent out fact sheets. They reported that while Biden’s proposed budget would invest an additional $11 billion to improve education, while lowering the cost of childcare for families, the House Republicans’ plan would cut spending by 22%, including: $4 billion in cuts to schools serving low-income families, impacting an estimated 26 million students nationwide, including $10 million in Title 1 funding for Vermont schools, impacting 20,000 Vermont students; cut supports for 7.5 million children with disabilities nationwide, including 15,000 in Vermont, which equates “to removing the equivalent of 100 teachers and related services providers from the classroom” in Vermont; slashing mental health support for students; eliminating student debt relief and Pell Grants that each affect about 33,000 approved applicants across Vermont.
What the GOP won’t admit (when a Democrat is president) is that government programs help people in need and cuts to them have negative consequences in every state and community.
To that end, Rep. Golden makes a modest proposal to take it slowly. He suggests reducing the deficit by $500 billion over the next two years, $2.1 trillion in five years, and $7.2 trillion in 10 years.”
Such a path keeps the deficit in check while allowing the economy to grow and reduce the debt-to-GDP ratio, and at least get the country moving in the right direction.
As for the debt ceiling debate, Golden calls it “all politics… Congress cannot cut its way out of the nation’s fiscal woes, just as it cannot tax its way out of them… The country would be better served if Congress skipped the standoff, cut to the chase and negotiated in good faith.”
Unfortunately, that’s easier said than done.
