By John Ubaldi
Contributor, In Homeland Security
With the media’s focus on the chaotic Donald Trump and Hillary Clinton presidential campaign, one issue that barely made the news is the federal budget deficit that will rise from $438 billion to $590 billion this year. It is the biggest deficit since 2013.
The increase in the federal deficit was completely ignored by President Obama when he discussed the federal budget for fiscal year 2017. On the White House’s website, the Office of Management and Budget states that federal deficits have fallen by nearly three-quarters since 2009 under Obama’s leadership – the most rapid sustained deficit reduction since just after World War II. The annual deficit in 2015 fell to 2.5 percent of the Gross Domestic Product (GDP), the lowest level since 2007 and well below the average of the last 40 years.
This deficit is far different from today’s level. In August, the non-partisan Congressional Budget Office (CBO) reported that the 2016 deficit will total $590 billion, or 3.2 percent of GDP, exceeding last year’s deficit by $152 billion.
President Obama and both candidates running for president have ignored the rise in the federal deficit. Donald Trump and Hillary Clinton have not even remotely addressed the deficit as they campaign across America.
Cause of Rising Federal Deficit
What precipitated the rise in the federal deficit? The CBO calculated that the rise in the deficit is due to a larger rise in spending. This spending can be attributed to a 6 percent increase in mandatory spending for programs such as Social Security, Medicare and Medicaid, as well as interest payments on the national debt.
The CBO reported that if everything stays the same and nothing is changed in Washington, the federal deficit will continue to rise in future years. The biggest deficit driver will be the increase in entitlement programs (Social Security and Medicare), healthcare and interest on the debt.
Both candidates fail to understand that entitlement spending represents two-thirds of the U.S. federal budget. Without reform, this spending will consume even more of the federal budget, contributing to an economic crisis similar to what Greece experienced in 2010.
Obama Fails to Curb Deficit Spending
Early in President Obama’s first term, he created the National Commission on Fiscal Responsibility and Reform, which was headed by Alan Simpson, former Republican Senator and Chief of Staff to President Bill Clinton. Unfortunately, the commission was unable to meet the voting threshold, with an equal number of Democrats and Republicans having to support its findings before recommendations were sent to Congress for approval.
In subsequent budgets, President Obama never accepted one recommendation from his own commission.
With the presidential election heading into the final months, neither Clinton nor Trump have discussed how they would reduce the federal deficit and the almost $20 trillion national debt.
How do Hillary Clinton and Donald Trump plan on addressing the rising budget deficit and the national debt? Neither candidate has produced a viable solution.
Clinton’s Policies Will Make Deficit Worse
Hillary Clinton will support the expansion of Social Security and the Affordable Care Act if she becomes president, which could make the federal deficit and the national debt substantially worse. On her campaign website, she states, “For 80 years, Social Security has been America at its best. Social Security reflects our shared belief that every American should be able to retire with dignity after decades of hard work. That no American should face poverty because he or she is disabled, or when a loved one dies. That we all have an obligation to each other.” But how would an increase in Social Security spending curb the rising deficit and national debt?
The most controversial aspect of Clinton’s policy proposals is the expansion of the Affordable Care Act. However, she doesn’t go into great specifics on what areas would be expanded or how she differs from President Obama.
Currently, the Affordable Care Act is seeing a dramatic increase in premiums and deductibles. As the next enrollment period begins on November 1st, consumers will see higher costs and fewer choices. In what areas would she expand the Affordable Care Act and how would her policies reduce the national debt and deficit?
Nothing in Hillary Clinton’s economic proposals would reduce the deficit and national debt. Her proposals would just make the U.S. economic situation worse.
Trump Fails to Address Entitlement Spending
Donald Trump is a difficult person to pin down in regard to the federal deficit. Trump’s website is very lean and only mentions a few topics. The only way to get a gauge on how Trump would reduce the federal deficit and debt is by analyzing his statements on the subject.
Unlike Hillary Clinton’s approach of larger government, higher taxes and expansion of entitlement programs, Trump is the polar opposite with lower taxes and lower regulations. He would leave entitlement spending alone.
Trump reiterated this precept in a March 2016 Republican primary debate in Miami. He said, “It’s my absolute intention to leave Social Security the way it is.”
Later, Trump seemed to backtrack on this statement. He hasn’t provided any detailed plan on reducing the skyrocketing U.S. federal budget and debt beyond his declaration to eliminate “waste, fraud, and abuse.”
How would Trump eliminate the waste, fraud and abuse? What part of waste in government would he eliminate? His ability to campaign effectively is one thing, but the realities of governing of a country are another.
Top Military Commander Predicted Debt Is Greatest Threat to US Security
In 2010, then-Chairman of the Joint Chiefs of Staff Admiral Michael Mullen stated, “The most significant threat to our national security is our debt….That’s why it’s so important that the economy move in the right direction, because the strength and the support and the resources that our military uses are directly related to the health of our economy over time.”
This statement was strange coming from a military commander such as Mullen, but he knew that for America to be a great power, it needed to get its fiscal house in order.
Our nation faces serious economic challenges in the future. If Clinton or Trump do not address this national security threat, the security of the United States will be weakened.