(WATCH) Debt Crisis

America has a money problem. A big one that’s growing every day almost beyond imagination. Scott Thuman talks about our national debt and the cost of it with Maya MacGuineas of the Committee for a Responsible Federal Budget, a bipartisan non-profit founded in the 80s.

The following is a transcript of a report from “Full Measure with Sharyl Attkisson.”
Watch the video by clicking the link at the end of the page.

Scott: When the next president takes office in January, what financial shape do you believe he or she will find this government in?

Maya MacGuineas: I mean, the country is in terrible financial shape right now. Probably the most worrisome thing is that interest payments are the second largest line item in our budget. We spend more on interest payments than we do on national defense.

For 2024, those interest payments are projected to be $892 billion, ahead of defense at $849 billion — only social security costs more ($1,452b).

Scott: So what would you say they’re walking into?

MacGuineas: They are walking into just an absolute fiscal disaster. If we don’t make changes, we’re walking into that fiscal disaster with candidates for a president promising basically not to do anything to fix it, and including lots of new promises that would actually make the situation worse.

Scott: Is it because they don’t really have true intentions of fixing the problem, or because it’s just so unpopular to acknowledge they might raise your taxes that we’re not hearing anything about it?

MacGuineas: We used to have leaders who knew that we had to make changes to fiscal policy, knew that we had to have spending caps. There was something called PayGo. If you want a new policy, a new tax cut, you offset it, you pay for it. That’s what budgeting is. Instead of continuing with those norms, we’ve changed to one, we don’t even have budgets anymore.

Scott: President Trump’s tax cuts passed back in 2017 or due to expire next year. Do both candidates plan to extend them and if so, how do they pay for that?

MacGuineas: So these tax cuts were unaffordable when we passed them. There was a great need for tax reform because we weren’t competitive in many ways, but we should have offset those tax cuts. We didn’t and it added trillions to the national debt. You now have President Trump and Republicans saying they want to extend those taxes though to their credit, a number of them are saying they want to offset the costs. You also have the Democrats, who oppose the tax cuts at the time, saying that they also want to extend the majority of them, those for everybody making under $400,000, which ends up being most people with the taxes. So, we’re talking about an extension that would actually cost three, four, possibly five trillion more if we don’t pay for that.

One of the biggest economic concerns for voters this year – the possibility of a recession.

Scott: We hear more and more these days the R word- Recession. How are we going to be able to handle a recession knowing the debt that we are facing?

MacGuineas: If we have a recession, it will be the wrong time to talk about raising taxes and cutting spending the things we need to do to fix the fiscal situation, but it may be more difficult to borrow for that recession, and either way, we will come out of any recession with even more debt than we had when we went in and all of the changes we will have to make to ultimately rebalance our budget will be so much more painful.

Scott: Has enough time passed that we’re able to say now whether or not Trump or Biden in their respective four years have raised the debt?

MacGuineas: The clear picture is that the debt went up by trillions under both of these political leaders, close to 8 trillion, about half of that, not counting Covid for President Trump and about 4 trillion, about half of that, not counting Covid, for President Biden, and that is how much they approved both through legislation.

Scott: Because we’re in such dire straits financially are other countries, our foes, China, Russia, are they trying to take advantage of us?

MacGuineas: Our fiscal weakness is a huge, huge national security weakness. We can’t respond to as many crises as we used to be able to, and absolutely our rivals around the world are well aware of this situation. In order to be the strongest country right now, it’s not just about the military and boots on the ground. That’s part of it, but it’s also economic. It’s also digital. All of these things matter, but our economic strength is absolutely key to our role in the world, and we are frankly flushing it down the toilet by running up our national debt in a way that leaves us so vulnerable geopolitically.

For the next resident of the White House add to the stack of existential threats our national debt.

For Full Measure, I’m Scott Thuman in Washington.

Watch video here.