PD Editorial: America’s debt cliff grows taller

One of the United States' major political parties is addicted to spending. The other is addicted to tax cuts. Democrats and Republicans are enabling each other's bad habits. Last month they agreed to a spending deal that locks tax-and-spend policies in place for the next two years.

Where is the fiscal discipline?

Not in the White House, where President Donald Trump's $1.5 trillion tax cut of 2017 is contributing to Wednesday's Congressional Budget Office forecast of yearly trillion-dollar deficits stretching into the misty future. The release of the CBO report coincided with Trump's proposal, which he quickly retracted, to stimulate the economy with a payroll tax cut that would turbocharge deficits still further.

Fiscal discipline isn't in Congress, either, where Democrats used their House majority to muscle through last month's budget deal, and Republicans are happy to pass any tax cut, revenue consequences be damned.

Both parties have accepted then-Vice President Dick Cheney's dictum of 2004: “(President Ronald) Reagan proved that deficits don't matter.”

As a matter of pure politics, modern history proves Cheney right. Reagan paid no political penalty for the nation's first 12-digit deficits in the 1980s. Democrats reaped no reward for President Bill Clinton's balanced budgets in the 1990s. President George W. Bush borrowed to finance wars and tax cuts in the 2000s, and President Barrack Obama used an unprecedented trillion-dollar deficit to prevent an economic collapse following the financial crisis of 2008.

Now Trump, having abandoned his 2016 campaign promise of balanced budgets, responds to the first signs of an economic slowdown by toying with the idea of bolstering his reelection prospects with a payroll tax cut. The Democrats who hope to win the White House in 2020, meanwhile, are competing to see who can offer the broadest expansions of federal spending without a workable plan to pay for it.

Politicians can ignore the ironclad realities of economics for only so long. Both the size and the trajectory of the CBO's new deficit projections bring those realities into focus.

The nonpartisan agency raised its deficit forecast for the current fiscal year, which ends Sept. 30, to $960 billion. Next year's borrowing will exceed $1 trillion, despite a relatively strong economy and low interest rates. The CBO estimates that the national debt - the accumulated total of all past deficits - will amount to $28.7 trillion by 2029.

All of that money is borrowed. According to the CBO, interest on the national debt will total $389 billion this year and will reach $914 billion in 2028. Every dollar paid in interest is a dollar that can't be spent for education, public safety, veterans or any other purpose. By 2023, the federal government could be spending more on interest than on defense.

The only way to reduce deficits and debt is to narrow the gap between spending and income, but there's a bipartisan consensus in favor of leading the country in the opposite direction.

Rising debt levels will sap the nation's resources, constricting its ability to invest or respond to emergencies. As Democrats and Republicans drift downstream, squabbling over Greenland or some other distraction, the roar of the debt crash ahead grows ever louder.

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