In response to questions from CNSNews.com, House Democratic Whip Steny Hoyer of Maryland and House Republican Majority Leader Eric Cantor of Virginia made clear this week that the American people should not expect either party to balance the federal budget anytime in the next decade.
That’s right: Neither House Democrats nor House Republicans plan on balancing the budget in the next decade.
As of the close of business on March 7, according to the Treasury Department, the national debt stood at $14.186 trillion. Since the Census Bureau estimates there are 112,611,029 households in the United States, this means the federal government has already borrowed $125,974 in the name of every American household.
Hoyer and Cantor are effectively predicting that this $125,974-per-household debt burden will grow larger month after month, year after year, for at least the next 10 years — no matter which party holds the U.S. House of Representatives.
At Hoyer’s Tuesday press briefing, CNSNews.com’s Matt Cover noted that the budget plan President Barack Obama sent to Congress last month does not propose to balance the budget any year in the next 10. Cover then asked: “Do you plan on introducing anything that balances within that 10-year timeframe, or is that possible?”
“Now, we’re at $14 trillion in debt,” Hoyer said. “I think the answer is — responsibly — we’re not going to get there in ten years. But we have to be on a very considered path to get there, certainly within the next decade-and-a-half or two decades.”
“I don’t think you can get there in 10 years,” Hoyer said. “I think it’s going to take a longer time. We’ve dug such a deep hole.”
Later on Tuesday, at Cantor’s press briefing, CNSNews.com’s Dan Joseph similarly noted that Obama’s plan does not call for balancing the budget in the next decade. Then he asked, “Will the Republicans pass a budget that balances sometime in the next decade, and if so, what year?”
“It is very difficult to balance the budget within 10 years without cutting seniors benefits now,” said Cantor. “And as I said before, our vision of entitlement reform will protect today’s seniors and those nearing retirement. As I am told, you cannot balance this budget in 10 years without severely impacting the benefits that current seniors and retirees are getting now. So the answer to your question is our budget will balance in the future while we work to protect today’s seniors and those nearing retirement and actually move towards reforming the programs for those 54 and younger.”
Elsewhere in his press briefing, Cantor said, “We have said that those 55 and older will not see any change in their benefits.”
So here, in a syllogism, is the Republican House leadership’s position on the deficit: 1) “You cannot balance this budget in 10 years without severely impacting the benefits current seniors and retirees are getting now,” and 2) “We have said that those 55 and older will not see any change in their benefits.” Therefore, we will not balance the budget until that time in the future — beyond 10 years from today — when doing so will not change the federal entitlement benefits of any American who is 55 or older.
But America cannot afford another decade of escalating debt.
In cold cash terms, running annual deficits and maintaining a debt that is already $14 trillion requires the U.S. Treasury to find the cash each month to pay not only for ongoing government operations that exceed ongoing tax revenues, but also for ever-growing sums of old debts that have come due.
A quick look at the federal government’s accounting for just the month of February over the past decade shows how this works. In February 2001, the Treasury needed to pay $201.2 billion to redeem old bonds. To cover that obligation and also that month’s operating deficit, it was forced to turn around and sell $211.7 billion in new bonds, increasing the net debt of the country.
By February 2005, the Treasury needed to pay $312.8 billion to redeem old bonds, and was forced to turn around and sell $392.2 in new bonds, again increasing the nation’s net debt.
In February 2011, the Treasury needed to pay $585 billion to redeem old bonds, and was forced to turn around and sell $660.8 billion in new bonds, again increasing the nation’s net debt.
The Treasury repeats this pattern every month of the year.
Hoyer and Cantor are telling the nation that both Democrats and Republicans will permit this to go on for at least another 120 months.
In one way they are hopelessly optimistic: They assume American taxpayers will still be able to finance the monthly churning of the debt that will have accumulated by then, and that creditors will still be willing to lend it.