If you went to the doctor but left with only a diagnosis, you might think that something was missing. Maybe your doctor should have offered an idea or two about a possible remedy before you went on your way.
Well, that’s where we are in politics. Based on the comments from presidential candidates marching through Iowa, voters are being accurately told that our growing national debt is a problem. But what about the cure?
For too long, candidates have sidestepped explanations of the potent medicine needed to heal the ailing federal budget. Iowans can help change that by insisting that the candidates put forward realistic plans that address the debt, protect our economic future and avoid unfairly burdening future generations with the consequences of inaction.
Based on current projections, whoever moves into the White House in January 2017 will inherit a budget on an unsustainable path:
• Growing debt. Federal debt held by the public will rise from over $14 trillion that year to more than $21 trillion after two presidential terms. Such heavy government borrowing diverts resources from more productive investments in the economy, slowing growth in wages. In addition, interest payments on the debt are expected to rise from $229 billion this year to more than $800 billion by 2025.
• Rising interest rates. Higher federal debt can result in higher interest rates, increasing the costs of mortgages, car loans, student loans and credit card debt.
• Shrinking investment. More of the federal budget will go toward financing today’s spending and yesterday’s promises rather than investments in future generations. By 2030, projections say 100 percent of federal revenue will go toward interest payments and “mandatory” spending programs such as Social Security and Medicare. This would leave little room for investments in areas such as defense, education, infrastructure, low income support or basic research.
This is why The Concord Coalition and the Campaign to Fix the Debt, two national nonpartisan organizations, have launched First Budget, an initiative to push presidential candidates to clearly explain what they plan to do about the debt.
The next presidential term will be crucial; the longer we delay comprehensive budget reform, the more difficult it will be. So, First Budget is urging voters in the Sioux City area and across the state to encourage candidates to detail what they would do in their first budget as president.
We hope voters ask how candidates can promise tax cuts or more spending without adding to the debt. Or, how we can stem the red ink if we don’t reform entitlements? How does the math work on their proposals? We need an adult conversation about the budget and national debt, one acknowledging that compromise from both sides of the aisle will be necessary to craft an effective plan.
While the country’s basic fiscal challenges may be hard to solve, they are not difficult to understand.
How big is this problem? Debt currently equals 74 percent of the country’s gross domestic product, the highest since the World War II era and projected to grow to unsustainable levels.
With the aging U.S. population, more people are leaving the workforce and starting to draw on entitlement programs, notably Social Security and Medicare. The government must spend more each year simply to provide the same level of services to more beneficiaries.
Federal revenue has not kept pace. The income tax is riddled with special provisions that reduce what many individuals and businesses owe. These are much like spending programs but receive far less scrutiny. Last year, they roughly equaled what Congress spent in a more direct fashion through regular appropriations.
Iowans deserve more from the candidates than vague platitudes and simplistic solutions. Fixing the structural problems in the budget will require more than just cutting waste and fraud, for example. Greater economic growth would help, but politicians should be realistic about how rapidly the economy can grow even under good conditions.
The fiscal and demographic challenges facing the country call for changes throughout the federal budget, and nothing should be left off the negotiating table. We believe that the presidential candidates must seek a mandate for such comprehensive reforms by committing themselves to tackling the debt in their first budget as president.