01.28.16

Senator David Perdue: Debt Projections For The Next Decade Are Very Sobering

DC received a loud wake-up call this week. Over the next decade our country will grow to nearly $30 trillion in debt.

WASHINGTON, D.C. – U.S. Senator David Perdue (R-GA), a member of the Budget Committee, today spoke on the Senate floor about the latest debt projections outlined in the Congressional Budget Office’s Budget and Economic Outlook Report for 2016 to 2026:

Click here to watch or click the image below.

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Transcript:

“Washington received a loud wake-up call this week. On Monday, the Congressional Budget Office, the CBO, released its biannual Budget and Economic Outlook Report and the projections for the next decade are very sobering.

The non-partisan study found that over the next decade our country will grow to nearly $30 trillion in debt. Folks, that is $30 trillion in debt. This is unbelievable. It’s unmanageable.

A number this large is nearly impossible to comprehend, and maybe that is why this seems to have gone unnoticed, buried under headlines about presidential politics, Super Bowl 50, Snowzilla, and Apple’s latest earnings statement.

But, what we can comprehend is who is responsible for paying off this debt eventually—we are, the American people.

With nearly $19 trillion in debt today and over $100 trillion in future unfunded liabilities, we’re well past the tipping point. That means, each American family is responsible today for nearly $1 million of this debt.

In addition, the Social Security and Medicare trust funds are expected to go to zero in roughly 15 short years.

According to an AEI analysis of this CBO report, spending on Social Security, Medicare, and other health care programs will grow at an average annual rate of 5.5 percent from 2016 to 2026, pushing spending on Social Security and health care alone to upwards of $4.1 trillion in 2026—just 10 short years from now.

Mr. President, this is more than we spent last year on the entire federal government. This is not 20 years from now. This is in the immediate future. We will be spending more on these items than we did last year on the entire government.

My colleagues on the other side of the aisle recognize that we’ve got a crises; however, their solution is to tax working people of America more. Well, Mr. President, that’s exactly what we’ve been doing and it’s not working.

In the last 15 years, our federal government’s spending has grown from $2.4 trillion in the year 2000 to $3.7 trillion in constant 2015 dollars. Because of that, over this same period—from 2000 to 2015—our federal debt has grown from $6 trillion in 2000, to $19 trillion today. It’s unbelievable.

However, last year, the federal government collected $3.2 trillion in taxes. This is the largest amount ever in our history.

We have a spending problem, not a revenue problem.

Furthermore, our country’s debt is not interest free, and taxpayers are already paying immensely for Washington’s fiscal malfeasance.

Last month, interest rates increased a quarter of a point—only a quarter of a point—but this equates to almost $50 billion in new interest expense every single year. Our country must borrow even more money to pay this additional interest expense. That, Mr. President, this is usually a true measure of total insolvency.

And, this interest rate increase is widely suspected to be followed by another increase later this year. Imagine if interest rates go up to just their 50 year average of 5.5 percent, taxpayers would be paying almost a trillion dollars in interest alone. This is more than twice what we spend on our military. It’s more than twice what we spend on our discretionary non-military spending. It’s unmanageable, and we’ve got to deal with it right now.

Having been in the business world for over 40 years, there are four words that I used to hear often and we used them frequently, ‘we cannot afford it.’ I personally have not heard these words once in Washington over this past year, my first year in the Senate.

We simply cannot afford all we are spending today, and the CBO says it will only get much worse.

Just look at Washington’s grand bargain this past year.

I voted against this bad policy because it significantly added to the national debt and eradicated the conservative budget we put in place last year, which did cut $7 trillion from the President’s budget request of last year.

Additionally, President Obama’s economic failures and disastrous health care law have dangerously set our debt up to soar even higher after he leaves office.

CBO projects Obamacare will enroll 40 percent fewer participants than expected in 2016. This will result in the federal government spending more money to support the failed marketplace exchange so it does not collapse.

The Hill reports, ‘spending on the marketplace is expected to rise to $56 billion next year, up from $38 billion this year. Within a decade, that total is expected to double to $109 billion.’

Plus, spending on health care programs has already jumped from $671 billion in 2008, to $1.1 trillion this year. And, CBO projects health care spending will nearly double in the next ten years, reaching $2 trillion by 2026. This is a train wreck, and it’s here.

Clearly, Washington cannot keep spending like this and we’ve got to make the changes necessary today.

We have already reached the point where our federal debt has become the greatest threat to our national and global security. At this moment we cannot pay for the tools needed to defend our country.

Last year, we spent roughly 3.2 percent of GDP on defense, less than the 30 year average of 4.2 percent of GDP. This is the lowest level in over a decade.

We’ve been at war for more than a decade, and in the process we have worn out our military equipment and desperately need to recapitalize and update it. More concerning, we are wearing out our people and we cannot fully support our women and men fighting on the front lines.

Mr. President, the crisis is here right now. It’s real, it’s dangerous, and it threatens our very way of life.

These are economic realities we must come to grips with quickly in order to turn things around and change the direction of our country.

We can solve our national debt crisis, but Washington’s business as usual approach must change and lawmakers must start saying ‘we cannot afford it.’

Solving the debt crises starts with totally reinventing the failed budget process, which has only worked 4 times in the past 40 years.

We have to also reduce the size of our federal bureaucracy and start with redundant agencies.

Washington already has 256 government programs running on autopilot, costing taxpayers $310 billion a year. And, there are hundreds of billions of dollars in duplicative programs and more opportunities to reduce waste.

It goes without saying, we need to get our economy growing again, and we can do this by changing our archaic tax laws, by eliminating unnecessary regulations stifling our free enterprise system, and by finally unleashing the full potential of our energy resources here in America—responsibly.

But, Mr. President, we will not solve this debt crisis until we save Social Security and Medicare, and address our spiraling health care costs.

Now the solution to this will take decades, but we’ve got to start now.

This CBO report reveals a stark reality—we are simply out of time. This debt crisis can no longer be ignored. It’s here now.

Washington must face up to that stark reality. We simply must start making the tough decisions required to put a plan in place to reduce this outrageous debt.

We must do this right now for our future, for our children, and for our children’s children.”