US Government About to Bump Up Against Debt Ceiling Again as Spending Continues Unabated
US Treasury Secretary Steve Mnuchin said the Trump administration and congressional leaders are getting closer to a deal to raise the debt ceiling.
Meanwhile, the US budget deficit is has increased by 23.1% year-on-year through the first nine months of fiscal 2019.
Mnuchin wants Congress to go ahead and raise the debt ceiling before the August recess because analysts now think the government will hit its borrowing limit earlier than expected.
According to a report by The Hill, a study by the Bipartisan Policy Center said there was a “significant risk” that the US government could reach the debt limit by early September. This would occur just after the summer recess. It had previously projected the government would run up against the debt ceiling in late October or November.
Congress raised the debt ceiling just four months ago. But the government is spending money so fast, it will likely hit its max borrowing level by early September. The Treasury has already implemented “extraordinary measures” in an effort to stem the tide.
According to The Hill, Congress had hoped to put off dealing with the debt ceiling until fall so it could package it with “other legislation to fund the government and set budget caps on spending.”
In other words, Congress wanted to bury the debt ceiling increase in a giant bill so people wouldn’t notice.
The US government has been spending money at an astonishing rate. So far, Uncle Sam has spent $3.36 trillion in fiscal 2019 (starting Oct. 1). That’s up 6.6% year-on-year. Revenues have also increased, but haven’t kept pace with the outlays.
With an additional $8 billion added to the budget deficit in June, 2019 spending now stands at $747.1 billion over revenues. The budget deficit for all of 2018 was $779 billion. The administration projects the deficit will top $1 trillion in fiscal 2019.
Earlier this year, the national debt crossed the $22 trillion mark.
While Democrats typically get tagged with the label of “big spenders,” Republicans bear the primary responsibility for this fiscal debacle. A Republican Congress authorized much of the spending and despite the rhetoric that occasionally comes out of the Oval Office, Trump signed off on every penny of the spending. The president has not made fiscal responsibility a priority and continues to push for more military spending.
Things won’t likely improve with a split Congress. Politicians will grandstand, and there will be a big hue and cry. You’ll even hear some people talk about fiscal responsibility. It’s all political theater. When it’s all said and done, Congress will raise the debt ceiling and keep right on spending.