Congress Wants To Blow Another $430 Billion Hole In The Deficit

Congress Wants To Blow Another $430 Billion Hole In The Deficit

By Andrew Wilford

Over the next couple weeks before the August recess, congressional Democrats are hoping to pass four spending bills that would add up to about $430 billion in deficit spending. Even by Congress’ lofty standards of spending beyond its means, that’s quite a substantial amount for just a couple weeks of legislating.

This rushed package of bills includes $49 billion in spending above current-year levels for an appropriations package, $23 billion for an insulin bill, $79 billion for semiconductor subsidies, and $279 billion for veterans’ health. This adds up to a $430 billion increase in federal spending over the next ten years — and that’s on top of the staggering $15.7 trillion Congress is already set to add to the debt over that same period.

The bills themselves have enough problems. The appropriations package makes up just six of the 12 appropriations bills Congress considers each year (and just 24% of discretionary spending), so there’s almost certainly more deficit spending to come down the road. While the insulin bill’s goal of reducing insulin prices sounds laudable, it is likely to increase insurance costs for most Americans in the form of higher premiums. And the semiconductor bill would subsidize manufacturers that sell around the globe, including in China, in the name of “national security.” Only the PACT Act, supporting the medical needs of veterans, is good on its merits, but the bill fails to find spending offsets.

Taxpayers have unfortunately grown used to politicians paying lip service to the need to tackle the national debt before promptly turning around and whipping out the credit card. But this cavalier attitude to the national debt should be particularly hard to take given the President’s hollow claims to fiscal responsibility.

President Biden has claimed repeatedly to have reduced the deficit this year, a deceptive claim that relies on Americans’ lack of familiarity with the nuances of the budget process. That’s because, while the deficit did indeed drop from $3.1 trillion in FY 2020 to $2.8 trillion in FY 2021, that’s not much to be proud of. After all, that is largely attributable to reducing crisis-level pandemic deficit spending, a reduction that was almost certainly smaller than it could have been.

Before the pandemic hit, the federal government was set to add $1 trillion and $1.1 trillion to the debt in FYs 2020 and 2021, respectively. That already-irresponsible level of deficit spending ballooned to $3.1 trillion and $2.8 trillion due to the pandemic and resulting stimulus bills. But taking credit for that drop from $3.1 trillion to $2.8 trillion is beyond absurd. And you can bet that President Biden next year will take credit for a “historic deficit reduction” next year when deficits are set to return to around the pre-pandemic norm of $1 trillion a year.

What’s more, the fact that Congress didn’t spend even more than that was despite Democrats’ best efforts, not because of them. The Penn-Wharton Budget Model estimated at the time that the Build Back Better package, had Democrats succeeded in passing it, would have added about $2.6 trillion to the national debt. It’s a bit like accidentally dropping your ice cream cone on the ground then congratulating yourself on your healthy eating habits.

This bit of budget voodoo was cynical enough, but it’s made all the more so by this spending blitz. Congress often relies on the confusing budget process and debt numbers that make your eyes roll back up in your skull to spend as it pleases, but taxpayers need to hold it accountable. Democrats and President Biden can claim to care about the deficit or they can spend as they please, but they can’t do both.

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.


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