WASHINGTON—A bipartisan group of 68 senators and representatives think it’s time that Congress be told how much new legislative proposals are going to increase the interest costs of the national debt before deciding whether to vote for them.
Cost estimates are prepared for all new legislative proposals by the Congressional Budget Office (CBO), but present projections don’t include additional debt interest, according to the group that is led by Sen. Mike Lee (R-Utah), Rep. Ed Case (D-Hawaii) and Rep. Michael Cloud (R-Texas).
“Our nation’s national debt recently surpassed $23 trillion, as reported by the Treasury Department on Oct. 31, 2019,” the 68 members of Congress said in a Jan. 15 letter to the chairmen and ranking minority members of the Senate and House budget committees.
The group includes 56 Republicans and 12 Democrats.
“It was only nine months ago that the U.S.’s outstanding public debt reached $22 trillion. CBO estimates that, by 2029, payments for net interest will nearly reach $928 billion — nearly three percent of our nation’s Gross Domestic Product (GDP),” the group continued.
“At this rate of growth, interest payments will soon eclipse military spending and crowd discretionary spending,” they said. The federal government hasn’t balanced its annual budget since the year 2000, at the end of President Bill Clinton’s tenure in the White House.
“Requiring debt servicing costs is simply a start to reducing our massive national debt, but it’s an important reform. Congress should weigh the real cost of legislation instead of ignoring costs to make new programs seem like they’re not as expensive,” the group continued in the letter.
The letter is addressed to Sen. Mike Enzi (R-Wyo.), chairman of the upper chamber’s budget panel, with Sen. Bernie Sanders (I-Vt.) as the ranking minority member; Rep. John Yarmuth (D-Ky.), chairman of the House Budget Committee, with Rep. Steve Womack (R-Ark.) the ranking GOP member of the committee. The two panels jointly oversee CBO.
The dire impact of accelerating debt interest costs as a result of Congress continually spending more than the Treasury Department collects in taxes and other revenues was even more vividly explained by Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
“The federal government will spend more on interest than on children by 2021 and more on interest than on Medicaid by 2023,” MacGuineas was quoted as saying in a Jan. 15 joint letter.
“Given the ever-growing impact of interest costs, it is critical that they be included in budgetary estimates for legislation—and there is no reason anyone should oppose this increased level of transparency,” she said.
“When Congress does not understand the true cost of a proposal, it is more likely to make decisions that endanger our ability to address future needs,” the joint letter reads.
“Including debt servicing costs in legislative cost estimates will better equip lawmakers to make informed spending decisions. Members of Congress and congressional staff would benefit from this information, which can help better inform the development of legislation and voting decisions. It’s past time Congress puts an end to reckless spending,” the letter says.
Americans for Limited Government (ALG) President Richard Manning told The Epoch Times on Jan. 20 that “it is stunning CBO doesn’t include the cost of borrowing in their projections about the impact of new legislation. The awful truth is that every new dollar that is authorized by Congress is a borrowed dollar and CBO’s failure to provide 10-year projections on the cost of borrowing that money borders on fiscal malpractice.”
The problem isn’t limited to one party, Republican strategist Matt Mackowiak told The Epoch Times.
“Fiscal responsibility will never come to Congress until a majority of the members put the next generation ahead of the next election. The majority party never wants to cut spending. Both parties are addicted to spending and until voters have an intervention nothing will change,” he said.
Mackowiak suggested ending federal deficits will require the adoption of a balanced-budget constitutional amendment.
Taxpayers Protection Alliance President David Williams told The Epoch Times “more information and transparency for taxpayers is always encouraged. The more the country knows about the true costs of legislation, the better chance we have of addressing the issues.”
He cautioned, however, that “there is no guarantee that knowing how much each piece of legislation and how it relates to borrowing will stop reckless spending, but it is an important step.”
Heritage Foundation budget analyst Romina Boccia lauded the proposal, telling The Epoch Times “it is simply common sense to include interest costs when spending borrowed money. American families understand that when they buy a home or a car on credit, they must consider the full cost of their purchase, including the interest costs they must pay. Congress should not be held to a lower standard when spending future taxpayers’ money by increasing deficits.”
Citizens Against Government Waste President Tom Schatz compared CBO giving Congress interest cost projections to a lender “showing a borrower the added costs for interest on a credit card or a loan that they would pay over time depending on who long they choose to pay back the full amount. In such cases, borrowers often increase their principal payments to avoid paying more interest when they can pay down or pay off other loans, or when they have more income available.”
But, Schatz noted, private borrowers “have a different incentive than the federal government to limit interest payments and debt because they have a limit on borrowing and can go bankrupt.”
Contact Mark Tapscott at Mark.Tapscott@epochtimes.nyc