The Congressional Budget Office (CBO) has released its Budget and Economic Outlook for 2024 to 2034. The February 7, 2024, report shows that the U.S. is in dire fiscal straits due to years of spendthrift behavior by members of Congress and the executive branch.
CBO reports that the federal budget deficit is already at $1.6 trillion for fiscal year (FY) 2024 and will grow by $20 trillion between FY 2025 and FY 2034 to a total of $54 trillion. The deficit will be 6.1 percent of the gross domestic product (GDP) in 2034, which has only happened during World War I and World War II, the 2007-2009 financial crisis, and the coronavirus pandemic.
Federal debt held by the public currently stands at 99 percent of GDP and will reach 116 percent of GDP, the highest level ever recorded. By 2054, it will reach 172 percent of GDP.
The staggering federal debt is even more concerning because interest rate hikes have made it more expensive to service. In FY 2024, interest payments will cost more than defense for the first time, and will be greater than Medicare spending by FY 2025. The amount of debt that the government must service along with the cost of paying interest on this debt makes reckless spending not only a fiscal crisis, but a national security crisis as well.
The only somewhat positive comment made by CBO is that spending caps work to limit the growth of the deficit. CBO found that “the biggest factor contributing to smaller projected deficits is the reduction in projected discretionary outlays stemming from the Fiscal Responsibility Act and the Further Continuing Appropriations and Other Extensions Act of 2024.”
House Budget Committee Chairman Jodey Arrington (R-Texas) laid out the grim fiscal picture and steps that Congress should take to address this crisis when he said, “today’s CBO baseline reveals that when Republicans stand firm on fiscal responsibility and force Congress to reduce spending, America’s fiscal outlook improves. While our debt remains unsustainable driven by Biden’s executive actions, mandatory spending, and interest on our debt, the Republican-led debt ceiling deal to reduce discretionary spending has strengthened our balance sheet. However, if we are going to ensure economic security for future generations, Congress must be serious about providing a check on expensive and overreach executive actions, reforming health care and welfare entitlement programs, and continuing to rein in the bloated federal bureaucracy.”
Washington has thrown fiscal responsibility to the wind and the bill is finally coming due. Congress should institute stricter spending caps and reduce waste, fraud, and abuse to rein in the federal deficit. A good place to start is Citizens Against Government Waste’s Prime Cuts report. If Congress does not act, current and future generations will suffer greatly from a devastating financial tsunami.
The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.
