Per an email update from the nonpartisan Committee for a Responsible Federal Budget, net interest cost has almost doubled with in the US annual federal budget. Here are a few paragraphs which tell the story:
“According to final data from the Treasury Department, net interest costs reached $659 billion (2.5 percent of GDP) in fiscal year 2023, a $184 billion increase from the previous year. In this piece, we explain that:
Interest costs nearly doubled over the past three years, from $345 billion in 2020 to $659 billion in 2023. Interest is now the fourth-largest government program, behind only Social Security, Medicare, and defense.
The federal government in 2023 spent more on net interest than it did all spending on children, and it also spent more on interest than most major programs or program areas including Medicaid, veterans’ programs, food and nutrition programs, and education.
Interest is currently the fastest growing part of the federal budget. After growing from $221 billion in 2013 to $345 billion in 2020, it has nearly doubled to $659 billion in 2023. Relative to the economy, net interest costs grew from 1.6 percent of GDP in 2020 to 2.5 percent in 2023.”
This is an alarm bell that needs to wake up all politicians in both parties. Putting it bluntly, neither party addresses the debt and deficit very well. For all of the chest beating that Republicans do, when they have been in charge of the White House and both branches of government they have handled these issues poorly making it worse. Raising the issue in a crisis planning mode to pass a budget is an attempt to mask that malfeasance. While Democrats have tended to do better about the debt and deficit (Clinton handed Bush a surplus budget, eg), they are still lacking in addressing the issue.
Per the nonpartisan CFRB and the bipartisan Simpson-Bowles Deficit Reduction Committee, we must have spending cuts and tax increases to address our problem. Democrats don’t want to hear the former and Republicans don’t want to hear the latter. They are both being tone deaf.
Note, if nothing is done, it will not take long for the interest cost to become the number one spend. Just think of your mortgage and credit card debt being too large a part of your own budget. In the last fiscal year ending last month, the US interest cost was over 10% of our expenses of $6.1 trillion, but about 15% of the revenue of $4.4 trillion.
We must take action, but fact based deliberate discussion needs to occur. Armed with data and telling lobbyists to wait outside, we can make a dent. Otherwise, our malfeasance will be harmful to things we must do.
musingsofanoldfart 