by Mitch Kokai
Senior Political Analyst, John Locke Foundation
In an era of heightened partisan rancor, Republican and Democratic leaders in Washington still managed to come together in a spirit of bipartisanship this week to do that thing they do best — spend.
Party leaders in Congress and the Trump administration reached a tentative budget agreement on Monday to increase federal spending by $320 billion over two years — at a time when the federal government is already running a $1 trillion annual deficit in the midst of a booming economy. The deal would also suspend the debt ceiling until July 2021, six months after the next presidential inauguration. In other words, it would solve the immediate political problems facing Republicans and Democrats in Washington while making America’s long-term fiscal problems even worse.
The budget deal looks like the swamp at its swampiest. The Republican president is nevertheless selling it as a victory. …
… It is certainly true that the federal budget cannot be balanced on the back of our military. It is also true that we cannot rein in the debt and deficit merely by targeting domestic discretionary spending. Any serious plan to deal with the debt must deal with the main drivers of debt: entitlements. Brian Riedl of the Manhattan Institute, who recently crunched the latest numbers from the Congressional Budget Office, notes spending on Medicare (including interest) in 2019 will exceed Medicare premiums and payroll taxes by $366 billion, with the deficit for Medicare alone jumping to $1.13 trillion in a decade.