U.S. National Debt Tops $32 Trillion for First Time
The recent bipartisan agreement suspending the debt limit for two years cuts federal spending by $1.5 trillion over a decade, according to the Congressional Budget Office, by essentially freezing some funding that had been projected to increase next year and then limiting spending to 1 percent growth in 2025. But the debt is on track to top $50 trillion by the end of the decade even after newly passed spending cuts are taken into account.
Mark Zandi, the chief economist of Moody’s Analytics, said during the standoff in May that spending cuts proposed by lawmakers failed to address the costs of social safety net programs. While avoiding a default would prevent an immediate crisis, he said, the ballooning debt is a persistent problem that needs to be addressed.
“The nation’s daunting long-term fiscal challenges remain,” Mr. Zandi said.
This week, the House Appropriations Committee began considering its next spending bills and, to appease the Republican majority’s ultraconservative wing, signaled that it would fund federal agencies at levels lower than President Biden and Speaker Kevin McCarthy had agreed to.
A failure to pass and reconcile House and Senate bills by Oct. 1 could lead to a government shutdown. And if the individual bills are not approved by the end of the year, a 1 percent automatic cut will take effect.
At the same time, House Republicans started considering a new round of tax cuts this week. The bill would expand the standard deduction for individual taxpayers and some business tax benefits that are intended to promote investment while curbing energy tax credits. The Committee for a Responsible Federal Budget, which advocates lower spending levels, estimates that the proposed legislation would cost $80 billion over a decade or $1.1 trillion if the measures were made permanent.
Source: The New York Times
