Something is happening between a divided Congress and President Donald Trump. They appear to have reached a compromise over, of all things, the debt ceiling.
Earlier this week, Trump issued a triumphant tweet stating: “I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy — on a two-year Budget and Debt Ceiling, with no poison pills. This was a real compromise in order to give another big victory to our Great Military and Vets!”
In uncharacteristically speedy fashion, the Democratic House quickly followed up with bipartisan passage. The Republican Senate is due to follow suit this week. The deal raises the ceiling by $324 billion, divided between domestic programs and increased military spending, and brings to an end the threatened government shutdowns and rancorous debates that have accompanied the debt ceiling deadline for years.
There’s just one problem, and it’s a big one. The resolution further inflates a national debt that has risen at double-digit percentages through the Trump presidency and that now stands at a record $22 trillion. Meanwhile the federal deficit — the annual gap between revenue and spending — tops $1 trillion.
It appears to no longer be fashionable to talk about fusty old things like debt and deficits among the nation’s leaders. Trump never mentions it, except dismissively. Republicans by and large also appear to have abandoned resisting rises in the debt ceiling, with the exception of some murmurs of dissent from the House Freedom Caucus. But any serious objections would have surfaced during the ill-considered Tax Cuts and Jobs Act of 2017, which benefited mostly corporations and the wealthy. Instead, Republicans clamored for the tax cuts, which are becoming a prime driver of the national debt and deficit and will be for years to come.
Trump’s Democratic rivals for 2020 have also spoken little of debt, preferring to propose costly new programs with few details on how to pay the tab.
The regular fights over the debt ceiling that have marked public debate since 2011 have done little to change the dynamic. In 2013 the government briefly shut down over GOP unwillingness to raise the limit for a debt that then totaled $16 trillion.
Some debt is healthy and natural. It may even be that the nation can handle more debt than once was thought advisable. But the U.S. debt has more than quadrupled since the late 1990s. At nearly $400 billion, the annual interest payment on that debt this year eclipses the hard-negotiated increases to domestic programs and the military that Democrats and Trump sought. And no one can think a debt level that now exceeds GDP is a preferred course, particularly in a country with an aging workforce and a wave of retirees living longer than ever.
This is unwise in the extreme. The national debt cannot be wished away, any more than inflation can. The U.S. is still in the midst of the longest peacetime economic expansion in its history. That, by any rational measure, is the time to pay down debts and prepare against the next economic downturn.
Senate Majority Leader Mitch McConnell has already begun ramping up talk of curbing “entitlements,” which includes Social Security and Medicare. Don’t be fooled. Even though they account for the lion’s share of federal spending, those programs also have dedicated sources of income and have contributed little to the debt.
The Star Tribune Editorial Board remains convinced that this country’s ever-mounting debt is a hindrance to the economy, as with any debt that takes money from more productive measures. Bipartisan solutions to bring it down must be a part of the 2020 discussion.
Minneapolis Star Tribune