CONGRESS SPENDS: THE DEBT ALSO RISES
Over the past year the Republican majority in the House and the Senate has managed to pass one major bill, their tax reform. That’s it. The Republicans have also consistently wanted to increase military spending. In order to do that spending caps put in place back in 2011 to hold back greater deficits had to be raised, and, the government’s borrowing limits had to be lifted. In a marathon congressional session last Thursday (Feb. 8th), which lasted till five thirty on Friday morning, Congress finally managed to make those increases possible.
Like college students putting off term papers till the very last night, the bleary eyed legislators barely knew what they had produced (652 pages is a lot to read). What they have done is create a whole new world for themselves. The consequences, many unintended, of this Thursday night marathon promise to be make the government’s next several years very different from the last one.
The House and the Senate have been profoundly effected this year by divisions within the Republican majority. It has been a long struggle between conservatives and ultra-conservatives (the Freedom Caucus) about how much to cut domestic spending. Therefore the budget bills that should have been done by last October 1st to fund the government departments were never done (instead, Republicans spent most of the year trying to kill off Obamacare). As a result, since last October 1st, with no 2018 budget, there have been an awkward series of four continuing resolutions extending previous spending. With its action last Thursday, the House created a fifth continuing resolution, to last till March 23rd or about six weeks, to give it time to at last create a combined budget bill designed to fund the departments till Oct 1st (the beginning of the next government money year, fiscal 2019).
The House and the Senate can do that because they will now be able to have money available. The military spending cap will be raised by 60 billion dollars (60,000 million) for this year and by 85 billion (85,000 million) for next year. Those are increases! Last year, before these increases, we spent just under 600 billion dollars on the military (600,000 million dollars)! The limits on domestic spending will be raised roughly proportionately; 63 billion (63,000 million) for this year and 68 billion (68,000 million) for next year. So, over two years, the combined caps will be raised by 276 billion dollars (276,000 million) (If those amounts representing only increases seem unimaginably large to you, the truth is that they aren’t really understood by people in the Congress either. One of the real problems in this government is that neither the people who vote for those amounts nor the people responsible for dispersing the funds are equipped to deal with these enormous numbers.).
With the spending caps raised, that still leaves the federal debt limit. The current federal debt limit means that the official federal debt cannot rise higher than the current approximately twenty and a half trillion dollars (20,500 billion, and every billion is a thousand million). It also means that until the debt limit is raised the government cannot borrow any more money. That debt limit will now simply be suspended (as it has been in the past) at least until March of 2019. Having passed legislation that will make the money to be borrowed for this year at over a trillion dollars, the Republican majority, and the Democrats too, will not want to deal with the debt limit until after the midterm elections this November.
There are some other provisions. Twenty billion dollars is to be authorized for infrastructure spending (roads, bridges, sewer lines). That doesn’t mean a very divided Congress will actually approve an infrastructure program before next November’s election. That seems unlikely. Six billion dollars is authorized to fight opioid addiction. Again, it may not actually be legislated. What this really means is that the Republicans, with some Democratic help, have given themselves a couple of years to let their spending dreams come true. The Republicans, who claimed to be so terrified about the rising government spending during the Obama years, are now willing to massively run up the debt in order to get the almost limitless military spending that they want. As they stumbled off to bed last Friday, the leadership of both parties in the Congress congratulated themselves on their success. There will be a price for younger tax payers to pay later. All of these increases will simply be borrowed.
It is difficult to write about these things without putting in an eye glazing amount of numbers. Those numbers, though, do represent real change. They will have real economic and political consequences. Some of those will be discussed next.
H.J. Rishel
2/11/2018
