EDITORIAL: Brighter future depends on more responsible management of national debt

OPINION:

The United States can’t run on a shoestring, but even a king’s ransom wouldn’t suffice when there is little interest in fixing the hole in the nation’s money pocket. The U.S. Treasury has never been so flush with cash and at the same time, the federal ledger has seldom recorded so much red ink. As new battles in the endless spending war loom, Americans watch with foreboding the gathering storm clouds of economic peril that their representatives could dispel if they only had the wits of a wage earner.

A reminder of financial troubles in an era of prosperity arose last week when Treasury Secretary Steven Mnuchin wrote to Congress, warning members that the government could run out of cash before the end of the summer: “We model various scenarios for our cash projections. Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes,” writes Mr. Mnuchin.

With the House scheduled to adjourn for its August recess on July 26 and the Senate on Aug. 2, little time remains to raise the debt ceiling, which currently stands at $22 trillion and change. Congress isn’t going to risk damaging the good faith and credit of the United States, so defaulting on money owed is not an option. After a proper period of hand-wringing and finger-pointing for the cameras, custom says lawmakers will bite the bullet and push the nation’s borrowing limits closer to the financial cliff.

With the Trump economy clipping along at around 3 percent annual growth, the Dow cracking the 27,000 mark, the national unemployment rate at a miniscule 3.7 percent and revenue projected to surpass a record $3.6 trillion in fiscal 2020, it’s easy to imagine blue skies for the American economy as far as the eye can see. With spending projected to hit $4.75 trillion, though, the fiscal forecast calls for another year of deficits breaking the $1.1 trillion mark.

As prudent observers often repeat, the nation doesn’t have a revenue problem; it has a spending problem. Individuals addicted to dollars rob banks. But nations hooked on spending other people’s money don’t have to: They own the bank. The only dilemma members of the U.S. Congress face is how to dole out the loot in a manner that keeps the outcry from a responsible public down to a dull roar.

Congress follows a formula that calls for close parity between defense and nondefense discretionary appropriations. A 2011 deficit-reduction deal held spending for fiscal 2020 at $576 billion for defense and $543 billion for nondefense, but a two-year budget deal between Republicans and Democrats allowed those amounts to float upward in tandem.

Lawmakers are shooting for an agreement that allocates something between the House-approved $733 billion and the Senate-favored $750 billion, including $69 billion for overseas contingency operations, for the Pentagon. For nondefense expenditures, the House has penciled in $639 billion, but Senate Republicans are reportedly waiting to see whether President Trump and House Speaker Nancy Pelosi will shake hands on higher spending for the new fiscal year or battle each other to rejigger the balance between defense and nondefense funds. Without a deal, previous spending caps would kick back in and take a sharp ax to the federal budget.

Within the Washington Beltway bubble, it all makes perfect sense. In the world beyond where common sense prevails, though, the financing of overspending with greater levels of borrowing makes no sense. All debts must be paid, and the interest on funds the government owes to lenders is on track to reach 10 percent of the 2020 fiscal budget, or $479 billion.

President Trump promised that his Tax Cuts and Jobs Act of 2017 would result in not less federal revenue, but more. He has been proved correct, with the U.S. Treasury expecting to pull in $110 billion more than the previous year by the time the new fiscal year begins on Oct. 1. But the president is powerless to alter the DNA of a governing body that believes more is never enough: The wastrels in Congress have a knack for continually spending every taxpayer dollar, and then some.

Republicans and Democrats agree by majorities exceeding 90 percent that a brighter future depends on more responsible management of the national debt, according to a poll conducted by the Peter G. Peterson Foundation. If the nation continues to spend like there is no tomorrow, eventually there will not be.