Following the recently ended fiscal year, it was reported that the federal government’s budget deficit increased significantly compared to the previous year. While this is certainly discouraging news, the existence of a deficit is not surprising or unusual. Critics are of course quick to blame the implementation of tax reform as the chief contributor to the recent deficit. However, the reality is that another factor has for years been driving deficits and as a result, adding to the national debt.
To provide some context, federal spending falls into a couple general categories: discretionary and mandatory. During the annual budget and appropriations process, lawmakers address only the discretionary side of the budget. Mandatory spending, on the other hand, is essentially left as is unless lawmakers offer solutions for reform to various programs.
The problem is that the mandatory side of the budget – including interest on the national debt – is by far the largest category and rapidly growing. According to the Congressional Budget Office (CBO), mandatory represented 34 percent of all government spending in 1965; today, that figure has risen dramatically to reflect more than two-thirds of all spending in 2018. By 2028, mandatory is on track to cover at least 77 percent of all spending.
Mandatory is mostly comprised of safety net programs like Social Security, Medicare and Medicaid. These programs, which serve many vulnerable Americans, are structured in a way that requires the government to automatically pay out benefits to those eligible and enrolled.
Despite claims to the contrary, Republican lawmakers are not pushing to eliminate mandatory programs or to senselessly cut the benefits promised to program participants. But if nothing is done at all to preserve the long-term existence of benefits, lawmakers recognize a nearing and far worse reality.
Without thoughtful reform, mandatory programs will eventually fail to deliver. In fact, CBO projected that the federal trust funds connected to Medicare and Social Security are quickly nearing insolvency. On the current path, Social Security as a whole is expected to become insolvent by 2030 – with the Social Security Disability Insurance Trust Fund unable to pay out full benefits as early as 2025. Medicare also faces an indefinite future; CBO recently projected that the Hospital Insurance Trust Fund could be insolvent by 2026.
In response to these warning signs, Republican lawmakers have consistently and responsibly responded with solutions to save and sustain the programs. For example, the House Budget Committee on which I sit this summer advanced a budget which calls for lawmakers to find at least $302 billion in deficit reduction over the next 10 years.
It is important to mention that solutions are not limited to the Republican side of the aisle. Along with my Democrat House colleague John Delaney, I was proud to again introduce legislation this Congress that calls for a bicameral and bipartisan commission to discuss and propose solutions for long-term Social Security solvency.
As has been the trend for years, the unchecked growth of mandatory spending is still the single greatest contributor to annual deficits and the rising national debt. While I remain supportive of responsibly stewarding taxpayer dollars on the discretionary side of the budget, mandatory reform is needed and necessary to ensure lasting prosperity for generations of Americans to come.