34 Trillion Reasons To Cut Federal Spending

Every hour the U.S. debt jumps $218 million. That's $5.2 billion each day.  Current total government debt stands at a staggering $34.228 trillion. As scary as those figures are, the debt is expected to skyrocket to $50 trillion by 2033, less than a decade away.

For perspective, the nation's debt was $5.67 trillion at the beginning of 2000.  In just over two decades, the current debt is nearly seven times higher.  Since 2018, Congress has shoveled on another $12.7 trillion to the debt mountain. 

Today there is no limit on how high the federal debt can rise.  Congress passed a bill in June of last year suspending the nation's debt limit through January 1, 2025.  It is the equivalent of handing a credit card for Congress to continue to rack up more debt without any restraints.   

The debt balloon is the result of Congress's insatiable appetite for spending more than the tax dollars the government collects. In the most recent fiscal year 2023, the federal government collected $4.44 trillion in taxes, but spent $6.13 trillion, creating a $1.7 trillion deficit hole. 

Deficits matter because the feds issue debt to fund the yawning canyon between revenues and spending.  Beginning with fiscal year 2020 through 2023, the government accumulated deficits totaling $9 trillion. Even drunken sailors are spendthrifts by comparison.   

Don't expect a baptism of fiscal responsibility to convert the current Congress. The Congressional Budget Office (CBO) forecasts a $1.6 trillion deficit by the end of fiscal year 2024 on September 30. Deficits are expected to top $2 trillion annually after 2031, reaching $2.6 trillion in 2034.

Revenues are not the problem.  Tax collections and fees rose 8% from 2022 to 2023.  Individual taxpayers forked over $2.18 trillion, accounting for 49% of the revenue collected by the feds. Fiscal accountability is a fleeting idea that has been drowned by a gusher of spending.

Paying for the debt created by deficit spending is getting more expensive.  Interest costs have nearly doubled the past three years from $345 billion in 2020 to $659 billion in 2023.  Interest is now the fourth largest spending category, behind only Social Security, Medicare and defense.

Those eye watering figures are projected to get worse.  Based on trends, the CBO forecasts that interest on federal debt will reach $1.4 trillion in fiscal year 2033, creating a budget nightmare.  This is fiscally unsustainable without Draconian tax increases or budget cuts or both.   

Balancing the budget, a feat performed by millions of American households, is apparently beyond the mental acuity of Congress.  Only twice in the last half-century has Congress found the political will to reach financial equilibrium--in 1969 and from 1998-2001 under President Bill Clinton,

Before even tackling a balanced budget, Congress must first reign in deficits.  Although it's easy to blame COVID spending for the spike in the size of deficits, Congress has been spending more than government revenues for the last 22 years.  Lawmakers have a spending dependency. 

Since 1997, senators and representatives of both parties have ignored the regular budget process of approving a budget that fully funds the government.  Congress seems to prefer chaos, failing to pass more than five of its 12 regular appropriation bills by the deadline in the last 26 years. 

In 11 of the past 13 fiscal years, lawmakers have not passed a single spending bill by October 1, which marks the beginning of a new federal budget year.  Instead, Congress employs a shell game, approving what's called continuing resolutions to partially fund the government over several months. 

Continuing resolutions maintain government funding at current levels, but often supplemental appropriations are shoehorned into a CR.  These stopgap gimmicks allow lawmakers to spend while obfuscating the full impact on deficits. This lack of transparency would not be tolerated in any business.

For all the brouhaha over CR's, these appropriation measures only cover discretionary spending. The hefty money is federal outlays for Social Security, Medicare, Medicaid, unemployment compensation and other entitlement programs. Funding is mandated by statues.  

These programs accounted for $4.6 trillion in spending in 2023, about 73% of the federal budget. Unless Congress tackles mandatory appropriations, spending will reach the stratosphere.  Lawmakers of both parties are deathly afraid of the political blowback of even suggesting a reduction in programs. 

Representatives and Senators are easily spooked.  Mention "government shutdown," defaulting on the national debt," or "reducing food stamps" and lawmakers capitulate. They prefer political theatre and gamesmanship to tackling the unpalatable but essential choices to restore fiscal integrity. 

What will it take to restore financial sanity?  Most likely an economic meltdown.  Short of a financial Armageddon, the solution is for voters to quit electing the same people to Congress and expecting a different outcome.  If voters make balancing the budget their top priority, there is hope for change. 

Medicare For All: Surest Way To Bankrupt America

Democrats, egged on by the party's rising socialist wing, are recycling a free health care idea with a shiny new label.  They are advocating "Medicare for All" with the lure of no co-pays, no deductibles and no-cost sharing.  Free healthcare for everyone.  It's political seduction.

A similar idea was first trotted out in 2016 by former presidential candidate Vermont Sen. Bernie Sanders, an avowed socialist. The 77-year old independent won over swooning young people with his Utopian idea of free healthcare.  But the scheme faded along with Sanders' presidential aspirations.

Then 29-year-old first-term Democrat Rep. Alexandria Ocasio-Cortez burst onto the political scene in January, resuscitating the concept with a catchy twist, "Medicare for All."  When the idea fueled flattering media coverage, many Democratic presidential candidates leaped on the bandwagon.

Ocasio-Cortez, a member of the Democratic Socialists of America, is a fervent disciple of a single-payer system.  Under her plan, all healthcare financing is provided by one entity, in this case the federal government.  Everyone receives coverage, regardless of income, occupation or health status.

With single-payer, about 156.1 million people covered by employer health insurance would be forced to give up their plans.  Private insurance firms would cease operations leaving every American solely dependent on the federal government for primary health coverage.  There would be no other choice.

Despite the allure of a government freebie, healthcare would not magically become free.  People may not pay the doctor, however, Americans will be on the hook for a steep bill for healthcare in the form of higher taxes and budget deficits.  The tab for the plan worries economists and financial experts.

Bloomberg News, a liberal media voice, unveiled an analysis of "Medicare for All" prepared by the libertarian Mercatus Center at George Mason University in Virginia.  Assuming the program was launched in 2022, the price tag for the first ten years ranged from $24.7 trillion to $34.7 trillion.

All those zeroes are difficult to grasp without some perspective.  For instance, the total federal spending for providing Medicare coverage in fiscal year 2018 was $712 billion.  Expanding the plan to cover all Americans would append an estimated $3.7 trillion annually to the cost of the program.

The government can barely afford its existing healthcare obligations.  The latest Medicare Trustees report released in 2017 calculated that the Part A Trust Fund, which covers payments for hospital care, will be exhausted in 2026.  That's three years earlier than the previous year's estimate. 

Consider in fiscal year 2018 total federal government spending stood at $4.1 trillion. Adding another $3.7 trillion would increase the nation's debt while triggering catastrophic tax hikes. America's debt has already crept past $22 trillion, double the amount at the end of 2008.  More debt is not free.

In the last fiscal year, taxpayers ponied up $364 billion in interest payments for the nation's ballooning debt.  That represented 8.3 percent of the federal government's total budget.  With interest rates rising, each new dollar of debt will be more costly to finance, hiking future interest payments.

Democrats' solution is to raise taxes on billionaires.  That always polls well with voters.  However, even if the Internal Revenue Service confiscated the current entire wealth of American billionaires--$2.39 trillion-- the figure would not even cover one year's worth of costs for "Medicare for All."

The economics of "Medicare for All" have already discouraged a several states from enacting their own ambitious single-payer healthcare programs. Last month North Carolina deep-sixed its plan after the costs were estimated at $101 billion a year.

Even that liberal bastion of free, California, pulled the plug on single-payer legislation even after it was approved in the state senate because questions cropped up about the source of funding $400 billion in annual costs.  Vermont also abandoned a copycat plan over the bloated expenditure.

For the sake of argument, let's assume "Medicare for All" becomes a reality.  The plan will exacerbate a problem no proponent ever talks about while plugging the virtues of Medicare, a program originally designed to cover seniors 65-years old and up.

Medicare coverage is no panacea.  It pays for substantially less services than private insurance plans offered by companies to their employees.  For example, it will not bear the expense for long-term care, most dental care, eye exams for prescription glasses, hospice care or routine foot care.

Ocasio-Cortez counters her plan will tack on vision and dental care under "Medicare for All." A grandiose gesture but Medicare reimburses doctors anywhere from five-to-40 percent less than private insurers for the same services. As a result, thousands of doctors no longer accept Medicare.

It is inconceivable dentists and ophthalmologists would agree to reduced reimbursement schedules after never having to take such a haircut for fees.  Physicians have operated under the Medicare burden for years and they are bailing.  Why would these specialists accept Medicare patients?

In 2013, an annual report by the Medicare Payment Advisory Commission, an independent congressional agency, found that nearly one-third (28%) of its beneficiaries had trouble finding a primary care physician willing to treat patients with Medicare coverage.

Every year more doctors are hanging out signs in their lobbies that read: "Not Accepting New Medicare Patients." According to the Centers for Medicare and Medicaid Services, 9,539 doctors quit serving patients with Medicare in 2012 because of lower payments for fees.

If millions of Americans are added to the rolls of Medicare, there is the looming threat more doctors will follow suit.  What good will Medicare coverage be if your primary care physician no longer accepts the plan?  "Medicare for All" advocates appear unconcerned about this prospect.

Even if doctors are coerced into taking patients with Medicare, there will be an insufficient number of primary care physicians to handle the anticipated increase in office visits.   According to national projections, there will be a shortage of 200,000 primary care physicians by 2025.

Before Americans fall in love with "free" healthcare, they would be advised study the consequences of such a plan. However, don't expect politicians to enlighten the populace.  They believe they can dupe naive American voters by just repeating the word "free" over-and-over-and-over.