Bam! We're Already Hitting the Debt Ceiling Again
by Amy Payne, Heritage Foundation, February 6, 2014
It’s timely that the Congressional Budget Office (CBO) put out new numbers on America’s financial situation this week. By the end of the week, we’ll be hitting the debt ceiling again.
The CBO’s report, which dropped the bombshell that Obamacare is projected to push 2.3 million people out of the workforce, is chock full of other disheartening information.
>>> More from the CBO report: Millions will lose their health insurance
For starters, “The nation’s fiscal situation is much worse today than when President Obama first took office,” says Romina Boccia, Heritage’s Grover M. Hermann Fellow.
The outlook on the debt is somber. Entitlement spending continues to grow on autopilot, and “Washington’s failure to handle the problem responsibly means a higher tax burden and a slower economy for younger generations,” Boccia explains.
The debt drags down the economy—it has contributed to America’s drop in the Heritage Foundation/Wall Street Journal Index of Economic Freedom rankings. The U.S. dropped out of the top 10 freest nations this year.
Heritage’s chief economist, Stephen Moore, adds:
By the way, one of the biggest ballooning expenses is interest on the debt, which rises from about $250 billion a year now to more than $800 billion in a decade. Wonderful: We will be paying more taxes not for vital public services, but to finance our past sins.
Of course, the Obama Administration and the media have found a way to spin the gloomy forecast by pointing to the CBO’s announcement that the budget deficit is down this year. The deficit shows how much government spending has exceeded revenue (the money the government is taking in from taxes) in a given year.
The deficit is only shrinking when you compare it to the fact that it exceeded $1 trillion every year during President Obama’s entire first term.
Moore points out the new normal:
This is progress? Half-trillion-dollar deficits would have been unthinkable a decade ago; now they are cheered as progress. We are living in an Obama era of diminished expectations.
Meanwhile, on Capitol Hill, lawmakers talk about passing a “clean” increase to the debt ceiling—to keep the deficit spending going and keep the debt piling ever higher. Moore says the heavy numbers from the CBO are more than enough reason to bring this to a halt:
This budget report is full of mostly rotten news, and it only fortifies the case for challenging President Obama’s demand for a “clean debt ceiling” extension with no reforms to get us off this reckless borrowing binge. A “clean” debt ceiling bill is a green light for Washington to keep up the binge spending. Ronald Reagan said it best: “This is like giving an alcoholic another drink.”
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