Expanding deficits pose threat to U.S., budget office warns

Womack strives to set courteous tone as House panel scrutinizes agency

WASHINGTON -- The acceleration of deficit spending poses a threat to the nation's financial well-being, Congressional Budget Office officials told the House Budget Committee on Tuesday.

"We're already at historically high levels of debt and deficits are very large, so they're going to keep adding to the debt. At some point there will be a problem, there will be a reckoning, if we don't change our ways," budget office Deputy Director Mark Hadley said during a hearing on Capitol Hill.

Hadley was asked about those risks during questioning by committee Chairman Steve Womack, a Republican from Rogers.

The Tax Cuts and Jobs Act, passed by a Republican-led Congress and signed into law by a Republican president, provides nearly $1.5 trillion in tax cuts over the next decade but includes no corresponding budget cuts to pay for the measure.

The national debt topped $20 trillion last year, and its growth is accelerating. In the fiscal year ending Sept. 30, the national deficit reached $666 billion, up from $586 billion the previous fiscal year, the budget office reported.

Budget office officials say the tax cuts will lower government revenue at a time when federal spending is rising.

The nonpartisan Committee for a Responsible Federal Budget, which monitors deficit spending, says the deficit is likely to surpass $1 trillion for fiscal 2019 and is on pace to top $2 trillion in fiscal 2027.

The budget committee recently launched a series of hearings looking into the Congressional Budget Office, a nonpartisan agency that analyzes economic and budgetary matters for the House and Senate.

Tuesday's hearing, the second of five, focused on "economic assumptions, baseline construction, cost estimating" and related matters, according to the committee.

Some lawmakers have been critical of the office, arguing that its estimates are too pessimistic.

But Tuesday's questioning wasn't hostile.

Womack set the tone for the hearing, telling his colleagues: "We are not here to invite attacks on an agency so vital to Congress' ability to budget independently. But we are here to see how things are being done and identify potential areas for improvement."

Rather than accusing the budget office of exaggerating the nation's fiscal woes, congressmen instead expressed concerns about the future.

"The American people ... know that this national debt is awful, horrible and that our spending spree is out of control," said U.S. Rep. Jodey Arrington, R-Texas.

The national debt, he said, is "the greatest threat to the future of this country," but he suggested that lawmakers may be too cowardly to confront it.

"Unless you can give us a little pill that we can all take that will give us a boost in our political courage, I don't know that you can help us with this," he told budget office officials.

U.S. Rep. Hakeem Jeffries, D-N.Y., called the most recent tax cuts "trickle-down economics" and suggested they would end up hurting the country.

"When Ronald Reagan cut taxes for millionaires and billionaires in the 1980s, it didn't lead to significant economic growth. It exploded the deficit. And when George Bush cut taxes for millionaires and billionaires in 2001 and 2003, it didn't lead to explosive economic growth. We got the worst economic crisis since the Great Depression," he said.

Womack expressed concerns about the cost of all this deficit spending. The U.S. had to spend $241 billion to pay for interest in fiscal 2016. That figure is expected to skyrocket over the next decade, even if interest rates remain low.

"The fact is, we have a debt crisis on our hands that is going to get increasingly more difficult if we can't get spending under control," Womack said afterward. "Interest payments on the national debt could become the second-largest program in the federal government. That should concern everybody."

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A Section on 02/07/2018

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