House Budget Committee Ranking Member Steve Womack (R-AR) issued the following statement after the Congressional Budget Office (CBO) released its latest report, the 2019 Long-Term Budget Outlook, which projects the debt held by the public will reach 144 percent of Gross Domestic Product (GDP) by 2049:
“Washington politicians act like the debt is a ‘future’ problem. This report makes clear that it is in fact a ‘now’ problem.
“For too long, policymakers have ignored the fastest growing portion of the federal budget and the biggest driver of our deficits: mandatory spending. When the cost of our debt payments is expected to eclipse our entire discretionary budget, we cannot afford to look the other way any longer.
“Unfortunately, that’s exactly what the House Majority continues to do as they advance an agenda that would impose job-killing taxes, stifle economic growth, and add tens of trillions of dollars to our nation’s debt. Some of these same lawmakers subscribe to the notion that the debt does not matter. CBO told us today in no uncertain terms, it does.”
As CBO Director, Dr. Phillip L. Swagel, warned, “the prospect of such large deficits over many years, and the high and rising debt that would result, poses substantial risks for the nation and presents policymakers with significant challenges.”
Key Findings from the CBO Report:
- Debt: CBO’s long-term outlook shows the public debt almost doubling from 78 percent of GDP today to 144 percent of GDP in thirty years. This is much higher than any previous debt burden in American history. The growth of mandatory spending (including interest payments on the debt) is the sole driver of this growing debt burden. As a percentage of GDP, discretionary spending is projected to decline and revenues to grow. Both of these changes significantly improve the budget outlook, but not by nearly enough to offset the unsustainable growth of mandatory spending.
- Mandatory Spending: Increases from 12.7 percent of GDP in 2019 to 17.5 percent of GDP in 2049, the highest level in American history.
- Discretionary Spending: Declines from 6.3 percent of GDP in 2019 to 5.1 percent of GDP by 2049.
- Net Interest: More than triples as a percentage of GDP over the next 30 years, increasing from 1.8 percent of GDP today to 5.7 percent of GDP in 2049. By 2046, CBO projects spending for interest payments on the national debt will exceed all discretionary spending.
- Revenues: Increases from 16.5 percent of GDP in 2019 to 19.5 percent of GDP by 2049—which would be close to the highest level in American history.
To learn more about the dangers of our nation’s enormous debt, click HERE.
To learn more about the increasingly prominent Modern Monetary Theory (MMT), click HERE.
To read the letter from Committee Republicans requesting a hearing on MMT, click HERE.