December 14th, 2009, Fairfax, VA—Americans for Limited Government President Bill Wilson today urged members of Congress not to increase the nation debt ceiling to a proposed $13.9 trillion, saying that “the future solvency of the nation is in grave danger, and it could come down to this one vote.”
“Congress is ready to give the American people an early Christmas present: slavish indebtedness for perpetuity,” Wilson said, adding, “In the meantime, Moody’s has issued a stark warning against the deteriorating public finances of the U.S., which if not corrected, will likely result in the loss of the nation’s Aaa bond rating.”
Last week, Moody’s Investor Services stated that U.S. “public finances are deteriorating considerably and may therefore test the Aaa boundaries…”
According to the Washington Post, “The House may vote this week to raise the federal debt ceiling by at least $1.8 trillion, as the current limit is set to be breached by New Year’s Eve.” The legislation would be included in the House “stimulus” bill, which will be attached to the annual defense appropriations bill.
Wilson said that attaching the national debt increase to troops funding was “a cynical admission that on its own, the measure would face certain rejection by the American people. Washington’s big spenders are hiding behind the troops.”
Congressional leaders say that the increase in the national debt has been as a result defense spending. Wilson said that while defense spending as a percent of the overall budget has actually decreased, “the uncontrolled growth of the debt has occurred via entitlements spending, which has far outpaced any other part of the budget.”
According to an Americans for Limited Government analysis of Office of Management and Budget (OMB) data, annual entitlement spending has grown from $386.4 billion in 1992 (27.98 percent of budget outlays totaling $1.381 trillion) to $1.36 trillion in 2009 (38.17 percent of budget outlays totaling $3.653 trillion). (Sources: www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf, and http://www.whitehouse.gov/omb/asset.aspx?AssetId=1702.)
Annual defense spending, on the other hand, has shrunk as a percent of total outlays from 21.6 percent to 18.12 percent.
“That is remarkable,” Wilson said, “when one considers the fact that defense spending has more than doubled since 1992.” Defense spending stood at $298.35 billion in 1992, and has grown to $662 billion in 2009.
“Entitlement spending over the same period has more than tripled during the same period,” Wilson added.
According to OMB data, entitlement spending as a percent of budget outlays will continue to increase, and defense spending will continue to decrease. In 2019, OMB projects that entitlements spending will stand at $2.482 trillion (45.93 percent of outlays totaling $5.403 trillion).
“Soon,” Wilson said, “entitlement spending will break the federal treasury and saddle the American people with an insurmountable bill that can never possibly be paid. In fact, we will not even be able to keep up with our interest payments.”
According to the New York Times, “the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically.”
In a recent column, Wilson wrote that “even as interest repayments grow exponentially, the debt will not shrink. In fact, the national debt has grown every single year since 1958. And the government projects that trend will continue unabated for the next decade.”
Wilson said that the growth of the debt could be directly correlated and shown to be caused by the growth of entitlements. The national debt has grown by over 295 percent since 1992, and will have grown by over 492 percent by 2020. Entitlement spending has grown by over 351 percent since 1992, and will have grown by over 642 percent by 2020.
“Entitlement spending is the greatest contributor to the growth of the national debt because it is growing at an even faster pace than the budget as a whole. That means it is, without a doubt, the most uncontrolled, profligate, unaffordable and unsustainable portion of the budget,” Wilson explained.
Currently, the national debt stands at over $12 trillion and is projected to top the Gross Domestic Product (GDP) in 2011 at over $14 trillion. By 2020, it will top $20 trillion.
“This is a problem that, if not addressed by Congress now, will destroy the solvency and prosperity of the nation. The only solution is to rein in entitlement spending and figure out a way to actually reduce debt,” Wilson said, concluding, “For, if we do not, this generation and future generations of Americans will be enslaved to a debt that cannot be paid.”
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