By Congressman Tom Cole (R-OK-4)
The Department of Treasury and Office of Management and Budget recently reported that the annual federal deficit had declined to its lowest level in years. At first glance, this sounds like very good news, and predictably President Obama was quick to claim it as his victory. However, even though the report certainly signals that some responsible choices have been made to slow the rate of spending, the reality is that the government still consistently spends outside its means and in so doing adds to our country’s already heavy burden of debt. While it is encouraging that the deficit is currently declining, debt is still dangerously rising.
Often confused, it is important to keep in mind that “deficit” and “debt” are not the same. While the terms are closely related, the annual deficit accounts for the difference between that year’s revenues and expenses. When the nation runs a deficit, it means that expenses are greater than the revenues available to cover those expenses. As a result, each year the nation runs even a small deficit, more is added to—rather than subtracted from—our total debt. To summarize, the nation’s total debt is equal to deficits accumulated year after year.
Certainly, a lower deficit is preferable to a higher deficit, so it is still encouraging that the deficit has shrunk in recent years. Upon the news that the deficit for the most recent fiscal year was at a record low, the Obama Administration immediately cheered and unsurprisingly claimed full responsibility. Treasury Secretary Jacob J. Lew remarked, “Under the president’s leadership, the deficit has been cut by roughly three-quarters as a share of the economy since 2009 — the fastest sustained deficit reduction since just after World War II.” That statement is disingenuous and lacking at best, considering that President Obama wasn’t the one who recommended or readily accepted the meaningful spending cuts that led to the responsible change in our deficit. Rather, since the president was first inaugurated in 2009, the nation has added $7.5 trillion to the national debt.
In fact, it wasn’t until after the historic 2010 election cycle—when Republicans reclaimed majority in the U.S. House of Representatives—that serious reforms were ushered in to deal with the president’s spending addiction. Upon taking back the House, lawmakers fought hard for spending cuts and combatted the president’s preference for higher taxes and his push for new programs that would require even more government spending. As a result of tireless Republican commitment to identifying spending cuts, shedding light on the long-term economic outlook and dealing with the drivers of our growing debt, Republicans are the ones who led what Secretary Lew described as the “fastest sustained deficit reduction.”
I am proud that Republicans have provided responsible solutions and never lost sight of the need for economic reform. The unfortunate reality is that debt and the expensive interest on that debt is still being accumulated every year. We are still spending more than we’re taking in every year, and with the retirement age nearing for many individuals of the “baby boomer” generation, we are projected to spend even more on entitlements—particularly Social Security and Medicare. If left unaddressed, this will undoubtedly lead to higher deficits once more.
Even with the positive report about the shrinking deficit, there is much critical work ahead in order to fulfill promises made to older generations, preserve the same promise for future generations and pay down our massive debt. The long-term debt crisis on our hands is one that can only be solved by finding common ground and striking true compromise to deal with the drivers of our debt. It’s unfortunate that so far, at least, President Obama has refused to address the basic drivers of the deficit and the debt—entitlement spending. Until he does, the debt will continue to grow and the long-term financial health of the country will deteriorate.