Wednesday, January 31, 2018

Trump ignores debt in State of the Union address

What About the Debt? Trump's SOTU Ignores a $20 Trillion Time Bomb - Hit & Run : - Eric Boehm:

January 31, 2018 - "The State of the Union address is traditionally an opportunity for presidents to make outlandish promises.... Historically, it has also been an opportunity to discuss the sorry state of America's entitlements and the unsustainable trajectory of the national debt.... [T]hese annual promises to address the country's debt are not meant to be taken completely seriously. Still, it's an important box to check....

"Donald Trump skipped that box in his first official State of the Union address. He did not once utter the words 'debt' or 'entitlement.' The only mention of 'deficit' came in reference to America's supposed 'infrastructure deficit' — in other words, it came in a call for even more government spending. Trump did reference the 'sequester,' a colloquial name for the 2013 budget act instituting limited cuts in discretionary spending, but only long enough to call it 'dangerous' and to ask for Congress to repeal it so more tax money can be shoveled into the Pentagon.

"Trump had a lot to say about the tax reforms he signed into law in December. Rightly so. Cutting corporate and personal income taxes will let Americans keep more of their own money and will likely boost the economy in 2018 and beyond. But the tax bill will also add an estimated $1.5 trillion to the national debt over the next 10 years. Republicans can pat themselves on the back ... but unless spending is reduced all they've really done is postpone the payment of taxes for 10 years or so....

"While the Congressional Budget Office says the deficit for the current fiscal year is only about $666 billion — only, as if a figure twice the size of Canada's annual budget is nothing — it's going to begin growing next year. The Committee for a Responsible Federal Budget projects that the country could face a trillion-dollar deficit in the next fiscal year, with annual deficits of $2 trillion expected by the mid-2020s....

"In the long term, the largest driver of the national debt are entitlement programs that run on autopilot, without needing to be renegotiated as part of each new congressional budget. In fiscal year 2016, $2.47 trillion of the federal government's $3.66 trillion in non-interest expenses — in other words, 67 percent of every dollar spent that wasn't going to payments on the national debt — went toward 'mandatory spending' on Social Security, Medicare, and Medicaid. Within a decade, those three programs will consume $4.14 trillion annually, according to the Congressional Budget Office.

"Congress, meanwhile, can hardly scrape together the votes for a months-long continuing resolution. Even with full Republican control, passing an actual budget — a budget that would affect only that other 33 percent of federal spending — seems like an impossible dream."

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