Red Ink: The Congressional Budget Office says the federal deficit will be 33% higher than last year's. Over the long term, the deficit picture is just as bleak. But on campaign trail, this looming threat gets zero attention from either Hillary Clinton or Donald Trump.
The CBO's updated budget projections show that federal government's fiscal outlook has worsened considerably over the past year.
Red ink in fiscal year 2016, which ends on Sept. 30, will hit $590 billion. That's much worse than the CBO had expected just a few months ago. It's also a big jump from last year's deficit, which was an already outrageously high $439 billion. Revenues climbed 1% this year, but spending jumped 5%.
What's more, the CBO projects that in 10 years the annual deficit is on track to more than double, topping $1.3 trillion by 2026. That's equal to 4.9% of the nation's economy, a scale that has been reached only seven times since World War II (and four of those years were under President Obama).
Compared with last year's forecast, all these numbers are all worse. The CBO now says that from 2015 to 2025, deficits will total $8.4 trillion. Last year, it projected deficits over these same years would total $7.4 trillion.
The CBO now expects the national debt to equal 84% of GDP by 2025. Last year, it said the debt-to-GDP ratio would be 77% by 2025.
And this depends on interest rates remaining low. As the CBO notes, "federal spending on interest payments would increase substantially as a result of increases in interest rates."
What's driving this dire picture? One word: Entitlements.
As the CBO notes, in 2016 alone, spending for Social Security, Medicare, Medicaid, ObamaCare and other federal welfare programs climbed 6%.
Over the next decade, spending on these programs will jump almost 70%. Federal spending on health care programs will rocket up 81% over those years, topping $2 trillion in 2026 and accounting for about a third of all federal spending. (So much for President Obama's promise that ObamaCare would fix the nation's deficit problem.)
As the CBO has long explained, the massive debt the nation is on track to accumulate poses risks to the economy, productivity, wages, the nation's capital stock and increases the likelihood of a fiscal crisis.
So what are Clinton and Trump proposing in the face of this increasingly dire outlook? They both want to add more debt.
Clinton's economic plan would, according to an analysis by the American Action Forum, would increase projected deficits by $2.2 trillion over the next decade, despite raising taxes by $1.3 trillion.
Instead of reining in entitlements, Clinton promises to expand both Social Security and Medicaid, while spending still more on ObamaCare insurance subsidies.
Trump isn't much better. Earlier this month, the Republican nominee told CNBC that if anything, the government should borrow more. "Interest rates are so low," he said, "that, yes, this is a time to borrow and to borrow long-term."
"Normally you would say you want to reduce your debt, and I like to reduce debt as much as anybody," he said. "The problem is, you have a military problem, you have an infrastructure problem — a tremendous infrastructure problem — and you have other problems."
But if Trump and Hillary have their way, the country will face another, far worse problem: runaway entitlements and growth-choking national debt.
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