Congress Continues To Ignore Looming Fiscal Crisis

The Congressional Budget Office’s (CBO) report on the federal budget for March is out and, unsurprisingly, the red ink is flowing like wine.

But on the upside, it’s slightly less than at the same point last year. On the reality side, the deficit for the first half of the government’s fiscal year was still more than $1.1 trillion.

And as anyone who has followed federal spending trends knows all too well, interest payments on all that debt are rapidly becoming one of the budget’s biggest line items.

According to the CBO, interest payments reached $440 billion in the first half of the fiscal year, eclipsing defense spending ($412 billion) and Medicaid and Medicare spending ($304 and $389 billion, respectively).

Only Social Security, at $711 billion, and the grab-bag “other” category ($631 billion) topped interest payments.

What does this tell us? As the CBO writes, we’ve got a spending problem:

Net outlays for interest on the public debt rose substantially—increasing by $133 billion (or 43 percent)—primarily because interest rates are higher than they were in the first half of fiscal year 2023.

Outlays for the largest mandatory spending programs increased, on net, by $93 billion (or 7 percent)…

And on those programs:

Spending for Social Security benefits rose by $59 billion (or 9 percent) because of increases in the average benefit payment (stemming mostly from cost-of-living adjustments) and because the number of beneficiaries increased.

Medicare outlays increased, on net, by $39 billion (or 10 percent), largely because of increased benefit payments to Medicare Advantage plans.

Medicaid outlays decreased by $5 billion (or 2 percent) as states continue to reassess the eligibility of enrollees who remained in the program for the duration of the coronavirus public health emergency. (The continuous-enrollment requirement ended on March 31, 2023.) CBO expects Medicaid enrollment to fall below 2023 numbers as states continue that process during fiscal year 2024.

Elsewhere in the budget, spending is rising, too – a net increase of six percent in the first half of the fiscal year.

The bottom line for all this: the bills for decades of living well beyond our fiscal means are coming due in the form of higher interest payments. They are no longer theoretical, or limited to some distant, unknowable future. 

And yet our political class, and the voters who enable them, continues to pretend there’s nothing to see here.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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Norman Leahy

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Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.

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