Last week, the Congressional Budget Office said that it projects this year’s federal budget deficit to be $400 billion higher, compared to its original estimate made just this February. That’s a whopping 27% increase from its guess made just four months ago.
The major causes of the sharp increase include $95 billion for military aide to Ukraine, Israel and Taiwan; $167 billion for student loan forgiveness; $60 billion more in new discretionary spending programs; Medicaid costs which came in $50 billion higher than expected; and a reduction of $70 billion in recovery of government funds stemming from bank failures.
We’re not totally surprised by this very bad news of a higher deficit. Congress likes to spend money, and Federal estimates of the cost of government programs always seem to be much lower than what really occurs; and tax revenue never seems to attain the heights projected by both Democrats and Republicans.
What is particularly galling to us is the moves by the Biden Administration to go around the clear decision by the Supreme Court that the President did not have the authority to erase student debt with the stroke of his pen, for the power of the purse belongs to Congress. President Biden is campaigning, in part, that former President Trump is a threat to democracy, yet here he is making decisions unilaterally, much like a Putin or a Xi might do right now.
What is truly disappointing is Republicans and Democrats joining together to increase spending over the already agreed upon budget to fund more foreign wars. Not long ago, the US House of Representatives had the right idea – they provided more funds to help our democratic ally-Israel, to defend itself against the radical organizations of Hamas and Hezbollah, but at the same time they cut spending by an equal amount elsewhere (the IRS). Unfortunately, they later folded “like a cheap suit,” and agreed to increase spending without any offsetting cost reductions elsewhere.
We’ve said it many times before, but we will say it again because it is a very important election year – with all this spending, we are going broke as a nation, and we cannot afford to operate as we have in the past. We are passing upon to our children and grandchildren a huge amount of unsustainable debt. Already the interest cost of this debt, a fourth of which goes to foreign nationals and governments, is more than what we pay for our own military preparedness to defend ourselves. In addition, the interest cost is also more than what we spend on Medicare for our own citizens (and migrants?).
President Biden doesn’t seem to be worried. As we stated in one of our previous articles, It’s Christmas Every Day of the Year, his most recent 10-year budget provides for huge tax increases to provide more revenue, but still projects an average of $1.63 trillion deficit for each of the next ten years.
Will former President Trump be any better? Let’s hope so. We can’t imagine he’d be any worse.
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