CRFB: A Dark Day for Our Fiscal Future

The House of Representatives passed the Senate reconciliation bill, sending it to the President’s desk.

This bill will be the most expensive reconciliation bill in history, adding $4.1 trillion to the national debt through 2034. If its temporary provisions are extended permanently, that total would rise to $5.5 trillion. Under the bill as written, the national debt would rise from 100 percent of the economy today to 127 percent by 2034.  

A summary table of the bill can be found here, and relevant charts and graphs summarizing the bill can be found here.  

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget: 

In a massive fiscal capitulation, Congress has passed the single most expensive, dishonest, and reckless budget reconciliation bill ever – and, it comes amidst an already alarming fiscal situation. Never before has a piece of legislation been jammed through with such disregard for our fiscal outlook, the budget process, and the impact it will have on the well-being of the country and future generations.

Our fiscal condition is currently precarious, with debt-to-GDP soaring towards an all-time record, interest costs surging past nearly all other parts of the budget, and the Social Security and Medicare trust funds heading towards insolvency. This bill, which has been described by champions as “a start” toward fiscal sustainability, would in fact make every single one of these problems worse – in some cases, dramatically worse.  

Given our current fiscal condition, lawmakers should be committed to not passing any legislation that makes the situation worse. Instead, demonstrating blatant disregard for the fiscal damage this will do, Congress passed a bill that would add more than $4 trillion to the debt, accelerate the insolvency of Social Security and Medicare, and leave us even more vulnerable to the whims of the Treasury markets.  

There were a number of lawmakers who, under immense pressure, nonetheless tried to improve this bill along the way. The final bill would have been even worse for the debt, absent their efforts. But ultimately you speak with your vote, and every Member of Congress who voted for this irresponsible bill enabled adding trillions of additional borrowing, when they should have been working to fix the debt.  

Throughout this process, we have eroded the fragile norms that stop politicians from adding unlimited amounts to the national debt. Congress didn’t just increase the debt by $4 trillion – they engaged in a massive cover-up about it, and they forced the scorekeeper to do the same. What’s the point of budgeting at all, if you can just make up whatever numbers you want?

Yes, the economy may well enjoy a sugar-high the next couple of years, as borrowing stimulates near-term consumption. But a sugar-high won’t be sustained, it will do real damage, and often what comes next is the crash. The longer-term health of our economy, American families, and our children will be worse off due to this debt-financed bill.