More must be done to reduce federal deficit spending

Opinion: More must be done to reduce federal deficit spending

Indeed, while we may celebrate the end of another round of debt-ceiling drama, it won’t make much of a difference in the long-term trajectory of the U.S. debt. According to the Committee for a Responsible Federal Budget, the plan as drafted will bloat the debt to 115% of GDP by 2033, as opposed to 119% before the deal, and reduce the deficit by at least $1 trillion and at most by $2 trillion over 10 years.

All the above assumes that the CBO’s own assumptions — some of which are nowhere near certain — are correct. Even ignoring the likelihood that politicians will use every gimmick in the deal to spend more, 10-year projections are always unreliable. As such, I expect much more spending and borrowing than is currently projected.

In this case, the CBO assumes that some of the provisions in the 2017 Trump tax cuts will expire on schedule, which would reduce deficits. That’s unlikely to happen. Republicans’ identity is tied to tax cuts while President Joe Biden has pledged not to raise taxes on those making below $400,000. That points to an extension of the tax cut provisions, which would add an estimated $2.5 trillion to the deficit over 10 years .

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