According to the CBO, the budget deficit this year will be $414 billion. Meanwhile, the federal debt held by the public is 74 percent of the gross domestic product (GDP). If spending continues at the current rate, the CBO projects this will reach 100 percent of GDP by 2038. However, that figure does not include our obligation to trust funds like Social Security which Congress has been raiding for decades. Counting what we owe to these trust funds, our total (gross) debt profile is over $18 trillion and is already over 100 percent of GDP.
The three largest drivers of spending, not including interest payments, are Medicare, Social Security, and Medicaid. The combined outlays for these programs have nearly doubled in the past forty years. Medicare and Medicaid alone have grown to such levels that after adjusting for inflation – the amount spent on these two programs is more than the entire federal budget in 1960. With the aging population of baby-boomers and the expansion of Medicaid under Obamacare, all three of these programs will continue to grow.
Making matters worse, we continue to send foreign aid to our enemies abroad rather than prioritizing spending here at home. The United States spends roughly 35 percent of the $1.7 trillion spent worldwide on militaries and national defense. To put this into perspective, U.S. spending amounts to nearly 3.5 times what is spent in the entire Middle East; 2.8 times that of China; and 7 times what is spent in Russia.
We have seen currencies and countries fall under their unsustainable debt. Interest on the debt this year alone is $261 billion, more than we spend on the Departments of, Commerce, Energy, Homeland Security, Housing and Urban Development, Interior, Justice, State, the EPA, NASA, NSF, and the Small Business Administration, combined. While our national debt continues to grow, investors will become uncertain of the government’s willingness or ability to pay U.S. debt obligations. It is time that we get our fiscal house in order to prevent potential catastrophe and keep this outrageous national debt from falling on our children and grandchildren.
The solution to the government’s fiscal crisis must begin by cutting spending in all areas, particularly in those areas that can be better run at the state or local level. In the previous two Congresses, I’ve introduced a comprehensive budget that balances within 5 years. I also proposed the Cut, Cap, Balance of 2015 which would balance our budget at 18 percent of GDP by 2021 and require Congress to pass a balanced budget amendment to the Constitution before the government takes on any more debt. The purpose is not only to show that it can be done, but it also demonstrates that when the size of government is reduced through reform, resources can be more efficiently prioritized without relying on tax increases.
Forty-six states across the nation have enacted balanced budget amendments in their state Constitutions. I have long been a proponent of adopting the same principle for the federal government. As I serve the Commonwealth of Kentucky in the United States Senate, I will remain committed to working with my colleagues to provide common sense solutions that will solve our nation’s fiscal crisis.