Philip Wallach, Picking the Wrong Fights: Why We Must Fix Our Broken Budget Process, American Enterprise Institute, March 2024.
Key points:
Deficits in the 21st century have been much worse than experts predicted they would be in the short period of federal surpluses around 2000, even though health care cost growth has been somewhat more modest than expected. Both parties in Congress have supported cutting taxes and increasing spending, resulting in unprecedented peacetime debt accumulating—and there is no reason to believe this trend will reverse.
America’s debt-service burden is quickly becoming crushing, with interest payments likely to rise to almost 4 percent of gross domestic product within a decade. In other words, American taxpayers will soon pay as much to service the debt incurred by past spending as they do on current national defense or nondefense discretionary spending. This may well lead to economic problems, but even if it does not, it will crowd out other important priorities and stoke political resentments.
The United States’ processes for budgeting and spending have proved utterly unequal to the seriousness of its debt problem. Intense congressional fights over the debt ceiling and annual spending bills have failed to produce—or even seriously consider—ambitious legislation that would do more than address annual discretionary spending. The modest correctives that current debates yield, such as the Fiscal Responsibility Act of 2023, are simply not enough, given the problem’s size.
Members of both parties who are serious about confronting the debt problem must insist on process reform, rather than seeking dramatic but ineffectual confrontations in the existing system.
