September 15, 2017
By U.S. Senator Mike Rounds
The federal government’s national debt recently surpassed $20 trillion. While there is plenty of blame to go around, the majority of this debt can be attributed to the past decade, as our debt was $10.6 trillion at the start of 2009. In other words, in the past eight years, the federal government has accrued as much debt as it accrued throughout the first 230 years of our country’s existence. It’s no wonder military leaders acknowledge it as being a top threat to our national security. Even more frightening, there is no sign of it slowing down.
High debt threatens economic growth by driving up interest rates and discouraging businesses and individuals from investing back into the economy. And it breeds even more debt as the interest on our debt must be paid to those who hold it – leaving fewer resources for other priorities such as roads, research and education.
Our broken tax system also plays a role by limiting our ability to collect revenues. Our current tax rates create a disincentive for companies to do business here in the United States, which then leads to fewer high-paying jobs for American workers, and encourage businesses to keep their profits overseas. Lowering tax rates would incentivize companies to repatriate that money and invest it back into our economy. Earlier this year, I introduced a proposal in the Senate to lower the tax rate in each bracket. It is but one step we can take to overhaul the tax code that will provide direct, immediate relief to hardworking families, jolt our economy and increase federal revenues.
While I do believe tax cuts are an important step to controlling our debt, the biggest driver of our debt is the rapid, unchecked growth of mandatory payments on safety net programs including Medicare, Medicaid and Social Security. If we continue down our current path, in less than ten years 99 percent of all federal revenue will have to be spent on mandatory payments and interest on our sky-high debt. No amount of cuts to defense and other programs such as crop insurance, education, highways and bridges will have a meaningful effect on debt reduction without also controlling the cost of these mandatory payment programs.
Mandatory payments already account for nearly three-fourths of our total federal spending today. This is because Medicare, Medicaid and Social Security have never been properly managed and Congress does not currently appropriately oversee them. They run on auto-pilot. Given that they are our largest federal expenditures every year, it is time for Congress to take an active role in managing their funding levels on a regular basis. This does not necessarily mean making cuts – it simply means giving Congress the authority to review them to make them as efficient as possible and to make sure they are available for individuals who need them, both now and in the future.
Surpassing $20 trillion in debt should be a wake-up call to Washington, which for decades has failed to own up to their responsibility to balance its checkbook. I continue to work with my colleagues in the Senate to shake up the budget process in Congress, and open up the entire budget to congressional review – including mandatory payments. It is the only way to slow down the fiscal train wreck. Simply delaying action and looking the other way is not an option.