Historically, and especially since the 1970s, Republicans and Democrats have made compromises by allocating funding for numerous projects into one, all-encompassing bill- an omnibus bill.
President Donald Trump and the 115th Congress proved that they are no exceptions to this unfortunate historical trend.
The federal government’s projected deficit for this year is over $1 trillion. This takes into account the $1.5 trillion tax overhaul Trump signed in December as well as Friday’s 2,200-page, $1.3 trillion omnibus spending bill.
Kelly Phillips Erb wrote in Forbes that the bill allocates $11.4 billion to improve customer service within the Internal Revenue Service, $1.6 billion for to add more fencing along the Mexican-American border, and $500 million for opioid crisis research. The bill also included a 2.4 percent pay raise for the military as well as increased funding for NASA and the National Park Service.
The budget continues allocating taxpayer dollars to Planned Parenthood, the Patient Protection and Affordable Care Act, and Deferred Action for Childhood Arrivals — three items that Trump said he wants to defund.
Republicans have a majority in both houses of Congress, however the bill passed easily, winning 65 – 32 in the Senate and 265 – 167 in the House of Representatives. Though rumors spread of a veto, Trump signed the bill into law on Friday in order to prevent another impending government shutdown.
$1.3 trillion is a hefty price to pay for a bad compromise.
The debt increased from $20 to $21 trillion in a record six months under Trump. Despite this, unprecedented levels of spending continue. To put this in perspective:
There are currently only $70 billion in circulation.
Until the establishment of the Federal Reserve in 1913, the United States government had accumulated only $2.9 billion in national debt.
In the 1930s, FDR added $236 billion to the national debt, a 1,048 percent increase from the debt at the end of Herbert Hoover’s term.
Reagan, whom many deify for his drastic tax cuts, added $1.86 trillion to the national debt, a 186 percent increase from Jimmy Carter. Bill Clinton added less than Reagan, with $1.396 trillion.
George W. Bush added $5.849 trillion, a 101 percent increase from Clinton.
Obama added $8.588 trillion, a 74 percent increase from the younger Bush.
$21 trillion is by far the highest debt the United States has ever experienced.
With Congress’ spending habits, it is also likely the lowest amount of debt we will experience in the foreseeable future.
According to the Congressional Budget Office, Congress will add $10 trillion to the national debt over the next ten years. The omnibus spending bill alone will add $1 trillion to the year’s deficit.
Over the past few years, the Federal Reserve has kept interest rates arbitrarily low — roughly half the amount they should be naturally — to allow the government to spend as it will. These low interest rates increase the amount of loanable funds, which in turn means more borrowing from banks and consumer spending. GDP increases, creating a false sense of wealth, as the artificially low interest rates send false signals to buyers and sellers in the loanable funds market.
Last Wednesday, the Federal Reserve increased the interest rate by .25 percent, and they plan to continue increasing it over the next two years.
The federal government currently spends $500 billion, 12.5 percent of its $4 trillion annual budget, to pay off the debt. As the interest rate rises to a normal level, spending on the debt will consume upward of 25 percent of the federal government’s annual budget.
The government could either cut other parts of the budget to allocate funds to pay off the debt or increase the size of the annual budget.
Judging by Trump’s most recent spending bill, the government will not stop spending any time soon.
So what does that mean? As the CBO predicts, $10 trillion in debt over the next ten years. Ask Venezuela what happens when a country accumulates incredible amounts of debt and has to pay for it at a high interest rate.
Trump is not to blame for our debt, but he it at least partially at fault for expanding it.
Justitia omnibus, the official motto of Washington, D.C., means justice for all. Trump might have forgotten justice, but he at least remembered omnibus.
Alexis Nester is a sophomore studying economics.