Federal financial reform is long overdue – it’s time for Trump to tackle it | NOTICE | Notice

The Grand Junction City Council is currently in the midst of budget discussions for fiscal year 2025. My fellow City Council members and I make difficult and challenging spending decisions, and as Mayor, I recognize the importance of ‘allocate our resources to better provide for the needs of the citizens of Grand Junction.

Unfortunately, balancing current budgetary needs with long-term fiscal responsibility only happens at the local level. Unlike the federal government, we must present a balanced budget that does not include unsustainable debt. The national debt is a serious fiscal problem that Washington must address now. Year after year, leaders in Washington continually increase the national debt with short-sighted budget decisions, and very soon those bills will come due.

The nation’s gross debt recently passed the $35 trillion threshold, but none of the candidates for the White House, and few members of Congress, have proposed policies to address the looming crisis.

Meanwhile, our debt continues to grow. From 2019 to today, debt held by the public has increased from 79% to 99% of our gross domestic product (GDP) – the measure of the country’s economic output. And this number will only increase. It is predicted that within three years, the public debt will exceed the size of the economy. Soon after, we will eclipse our record debt-to-GDP ratio of 106%, reached after spending hundreds of billions of dollars to make the world safer for democracy during World War II. By 2034, this ratio is expected to reach a staggering 122%. The inevitable results of this unsustainable national burden are slower economic growth and higher inflation and interest rates than we would see without such levels of debt.

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Like any borrower, the federal government is not immune to the shock of high interest rates from one generation to the next. Debt interest is now the fastest growing item in the national budget, reaching nearly $900 billion this year. Money spent servicing our debt limits the government’s ability to respond to national emergencies and invest in the modern technologies needed to ensure our national security in an increasingly dangerous world.

At the same time, the vital Social Security program will face insolvency within the decade as it struggles to cover the growing number of retirees from the baby boomer generation. If nothing is done to shore up its finances, the program will not be able to pay full benefits starting in 2033, according to its administrators. This would result in an across-the-board benefit cut of 21%. In such a scenario, the average two-earner couple retiring in 2033 would face an annual reduction in benefits of approximately $16,500. Clearly something needs to be done to reshape the program, because failure to do so would guarantee its insolvency.

The alarming budget dilemma we find ourselves in cannot be attributed to a single president or a single political party. Since 2001, 80% of laws that have increased the debt have passed via bipartisan vote. Debt and deficits have continued to soar under Democratic and Republican administrations and under a bipartisan Congress over the past two decades. It seems that one thing policymakers in Washington can agree on is the right to spend beyond our means without worrying about how we’re going to pay for it.

The last time our federal budget had a surplus was in 2001, during the Clinton administration. During this period, the government earned more money than it spent, with most of the difference going toward gradually paying down the national debt. However, a combination of tax cuts, increased spending, and emergency funding allocations for crises like the Great Recession and COVID-19 have pushed debt to near record levels. To begin putting debt on a negative trajectory, fiscal policy must focus on stabilizing debt by ensuring that it does not grow faster than the economy as a whole. Then we can start working hard to pay off the debt in the long term.

Budget issues will be on President-elect Donald Trump’s agenda, and he is expected to start with a simple commitment to pay the cost of new spending or tax cuts without increasing overall spending. This would demonstrate the seriousness of the threat that our exploding national debt poses to the country’s future.

Abram Herman is mayor of Grand Junction.