Plenty of attention has been paid to scandals, theatrics and leaks this presidential campaign. So let’s, for a moment, give the spotlight to a couple truly important issues that should be the focus of Wednesday night’s final presidential debate: the burgeoning national debt and costly entitlement programs.
The picture is grim. A recent report by the nonpartisan Congressional Budget Office said the national debt, now $19.5 trillion, will grow rapidly through 2026, with total budget deficits of $8.5 trillion over that span. “That amount of debt relative to the size of the economy (is) more than double the 50-year average of 39 percent,” the CBO noted.
About half the spending growth will come from Social Security and Medicare as baby boomers continue to retire. Demographers expect America to have 37 percent more people 65 and over by 2026. By 2030, it appears there will only be two Americans working for every retiree getting Social Security, and interest payments on the national debt — the least helpful government spending of all — are expected to consume 14 percent of the federal budget and keep going up.
This is not sustainable. Eventually the U.S. would not be able to meet its obligations, either to its own people or to the creditors who finance our red ink. That would likely mean a global depression.
So what do Hillary Clinton and Donald Trump want to do about this huge problem? Clinton would ignore it. Trump would make it even worse.
According to a recent analysis by the Tax Policy Center, which is jointly run by the Brookings Institution and the Urban Institute, Clinton’s proposal to raise taxes on the very wealthy would generate an additional $1.4 trillion over the next decade. But Clinton has also proposed a list of costly initiatives: heavy subsidies for in-state tuition at public universities for students from households making less than $125,000 a year; a major expansion of coverage under the Affordable Care Act, including immense new subsidies to persuade 19 holdout states to begin providing Medicaid to low-income adults; $275 billion in added infrastructure spending over five years; and more. And she has vowed to fight reductions in Social Security benefits and to seek additional benefits for widows.
This is not the platform of someone who thinks a giant fiscal crisis looms in coming decades.
The Tax Policy Center says the massive tax cuts Trump has proposed would reduce federal revenue by $6.2 trillion over the next decade. Trump disputes the estimate and says the growth that would be triggered by the tax cuts and the money that would be saved by a program in which every government program but defense, Medicare and Social Security are cut by 1 percent annually would end up making his proposal revenue-neutral.
This remarkably rosy scenario doesn’t look credible to economists not in Trump’s employ. Walling off three budget areas that are the most in need of containment and targeting the rest of government can only yield marginal savings that don’t change the march to chaos laid out by the CBO.
This is not the platform of a serious person.
What would such a platform look like? It would probably look like the plan released in 2010 by a presidential commission led by former Sen. Alan Simpson, R-Wyo., and Erskine Bowles, a Democrat who was White House chief of staff for Bill Clinton. It called for $2.9 trillion in spending cuts and $2.6 trillion in tax increases over 10 years.
It addressed the cost of Social Security by gradually but sharply increasing how much income is subject to the Social Security tax, increasing the retirement age to 68 in 2050 and 69 in 2075, and using a different formula to determine cost-of-living benefit increases. It sharply boosted revenue by taxing capital gains and dividends as normal income. It did dozens of things that offended powerful interests, and it died a quick death.
Now we’re six years closer to the cliff, and our presidential candidates still don’t take this issue seriously. Or maybe they will — finally — Wednesday night. For the sake of our future, we sure hope so.