The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Another fiscal year has come to an end and yet the nation’s economic outlook isn’t appearing any brighter. FY 2024’s deficit totaled $1.8 trillion, meaning we borrowed a whopping $5 billion on average every day. We’re borrowing nearly double the amount we borrowed annually before the pandemic, and this is projected to grow indefinitely. This is no way to run a country. In fact, the way we have been running the country is we don’t pass budgets; we don’t pay for new policies; we don’t address our major entitlement programs, which are facing insolvency; and we tolerate the two major presidential candidates competing over who can promise to give away more.
In FY 2024, we spent nearly $900 billion on interest on the debt alone. That’s more than we spent on national defense, Medicare, and children at the federal level – just a truly astounding figure. The national debt is on track to reach a record share of the economy in just two years, a sobering milestone for both the next Congress and whoever wins the presidency in November.
The next year will bring several fiscal hurdles for Congress and the new President to confront: the reinstatement of the debt limit, the end of discretionary spending caps, and the expiration of large parts of the tax code as well as health insurance subsidies. Paramount to confronting these challenges will be to ensure that we don’t grow those $2 trillion annual deficits into $2.5 or $3 trillion.
We need to put our national debt on a downward sustainable trajectory. Failure to do so will result in a smaller economy, higher interest rates, increased geopolitical threats, generational inequity, and a higher likelihood of a fiscal crisis.
