New Budget Deal Puts National Debt Back on the Rise

 

Washington in action! From the New York Times:

The House on Friday morning overwhelmingly approved a $1.15 trillion spending measure, as part of a sweeping, year-end fiscal deal that also includes a package of tax breaks worth more than $620 billion for businesses and low-income workers. The Senate was also set to approve the legislation, bundled into a single bill, in a fast-track series of votes later Friday morning. …

After a period of belt-tightening in Washington — including automatic budget cuts known as sequesters imposed in 2013 — the spending measure provides a notable $66 billion increase in federal outlays above previously agreed-upon limits, divided equally between military and nonmilitary programs, for 2016. It also represents a return to a more traditional appropriations process, with lawmakers directing money to an array of their priorities, including a $1.4 billion increase for military construction projects and $2 billion increase for the National Institutes of Health.

And how will this budget deal affect the budget deficit and federal debt? Well, it will make them bigger, of course. Here is Goldman Sachs:

Overall, this brings our deficit totals to $650bn (3.5% of GDP) for FY2016, $575bn (3.0%) for FY2017, $575bn (2.9%) for FY2018, and $625bn (3.0%) for FY2019 (Exhibit 2, left panel). We expect the level of federal debt/GDP ratio to remain broadly stable, rising by around 1% of GDP per year over the next few years.

And the chart the quote references:

pethokoukis_12182015

Note that, at least as GS calculates things, the federal debt will again be edging higher toward 80% of GDP vs. the CBO baseline that had it drifting a bit lower. It is tough to buy concerns about potential debt crises when policymakers seem perfectly content to leave debt at historically high levels.

There are 10 comments.

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  1. Kozak Member
    Kozak
    @Kozak

    So how exactly would it be any different if the Democrats controlled the House and Senate?

    • #1
  2. Dave_L Inactive
    Dave_L
    @Dave-L

    Kozak:“So how exactly would it be any different if the Democrats controlled the House and Senate?”

    Purist.

    • #2
  3. Tim H. Member
    Tim H.
    @TimH

    I try not to get too worked up over the details of budgets, but honestly, this just makes me despair. They’ve got the power of the purse in principle, but if they are too afraid to exercise it, what good is that check on the executive?

    • #3
  4. I Walton Member
    I Walton
    @IWalton

    Listen to Levin podcast on member feed.

    • #4
  5. Kozak Member
    Kozak
    @Kozak

    Dave_L:Kozak:“So how exactly would it be any different if the Democrats controlled the House and Senate?”

    Purist.

    My brand new “conservative” GOP congressman (Rouzer NC) is crowing about this vote on facebook. He’s getting savaged, as he should be, by his constituents.  I’m going to try and make sure he’s one and done in the House.

    • #5
  6. Rodin Member
    Rodin
    @Rodin

    I have posted an Open Letter to Speaker Ryan in the Member Feed.

    • #6
  7. Duane Oyen Member
    Duane Oyen
    @DuaneOyen

    Tim H.:I try not to get too worked up over the details of budgets, but honestly, this just makes me despair.They’ve got the power of the purse in principle, but if they are too afraid to exercise it, what good is that check on the executive?

    Your solution is what?  Shut down the government?  Right now?

    I hear this over and over, that all we needed to do is “hang tough” and we’d have a good deal (though every person has a different wish list “must” that is characterized as a betrayal if not effected and the people who say this in certain ways providing negotiation advice have obviously never negotiated anything).  Thus, McConnell and Ryan are secret lefties or mushy incompetents who don’t care about spending, etc.

    If we can’t force a vote on separate appropriations, and the other side is happy to shut down the government because they know that a) they will benefit and b) we will be blamed, the conventional wisdom on the Right is untenable.

    We need to win before we can win.  Period.

    • #7
  8. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    Duane Oyen:

    Tim H.:I try not to get too worked up over the details of budgets, but honestly, this just makes me despair.They’ve got the power of the purse in principle, but if they are too afraid to exercise it, what good is that check on the executive?

    Your solution is what? Shut down the government? Right now?

    I hear this over and over, that all we needed to do is “hang tough” and we’d have a good deal (though every person has a different wish list “must” that is characterized as a betrayal if not effected and the people who say this in certain ways providing negotiation advice have obviously never negotiated anything). Thus, McConnell and Ryan are secret lefties or mushy incompetents who don’t care about spending, etc.

    If we can’t force a vote on separate appropriations, and the other side is happy to shut down the government because they know that a) they will benefit and b) we will be blamed, the conventional wisdom on the Right is untenable.

    We need to win before we can win. Period.

    The same thing was said the last time we got pantsed.  Doing the same thing over and over again, especially after running on a platform of “trust us, we won’t do THAT again” necessitates, in my mind, a beating from Fortress America.

    • #8
  9. Kozak Member
    Kozak
    @Kozak

    Duane Oyen: If we can’t force a vote on separate appropriations, and the other side is happy to shut down the government because they know that a) they will benefit and b) we will be blamed, the conventional wisdom on the Right is untenable. We need to win before we can win. Period.

    So what, we need a solid house majority, a filibuster proof Senate AND the Presidency before we can make any kind of progress?  You know how many times that’s happened in my 60 years? Zero.

    Somehow the Left manages to move the ball anyway.  Why? Because they are willing to FIGHT.

    • #9
  10. Tim H. Member
    Tim H.
    @TimH

    Right. I’m not pushing a government shutdown. I want them to take the advantage BEFORE it gets to that point. Do whatever it is the Democrats do with the budget (but actually pass one) whenever there’s a Republican president. Use their political skills, if they have any. Since the conventional wisdom is (and for goodness’ sake, I don’t want to debate whether it’s true again) that the GOP will invariably be hurt by a shut down, then the Democrats like to get the GOP into a situation where it either has to give in to the Democrats or get a shut down. So figure out a way to avoid that choice.

    I don’t know how to do it. Thank goodness I’m not a politician. But need to elect at least a few people who DO know how to do it. Who have exactly those political skills, to outmaneuver our opponents and win. Stop getting cornered into the shutdown dilemma. If we get to this point, it means we did something wrong earlier on.

    • #10

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