Financial crises, spending on wars add to growing US national misery

Why is the United States facing a $31.4 trillion legal limit on borrowing? Blame both Democrats and Republicans.

The deficit grew by $12.7 trillion when Republican presidents George W. Bush and Donald Trump were in office, and by $13 trillion under the Democratic administrations of Barack Obama and Joe Biden.

It has been nearly a quarter-century since the federal government has spent less than it received in taxes.

Congress has borrowed to its legal limit to finance wars and tax cuts, expand federal spending, and provide for programs such as Social Security, Medicare and Medicaid, as well as "pet" projects for constituents.

The biggest drivers of debt have been the federal responses to two sharp economic downturns: the 2008 financial crisis and the 2020 pandemic recession.

"There have been bipartisan tax cuts and bipartisan spending increases" driving that growth, Maya MacGuineas, president of the Committee for a Responsible Federal Budget and perhaps the preeminent deficit hawk in Washington, told The New York Times. "It's not the simple story of Republicans cutting taxes and Democrats growing spending. Actually, they all like to do all of it."

The terrorist attacks on the US in 2001 spurred Washington into a rearmament push, as Bush mobilized for wars in Iraq and Afghanistan.

He did not raise taxes to pay for those conflicts. Neither did his successor, Obama, who inherited the conflicts. The resulting spending added trillions of dollars to the national debt.

Then in 2018, Trump spurred a new round of tax cuts — which did not include spending cuts to offset their cost.

Trump and his fellow Republicans claimed those cuts would "pay for themselves" by boosting economic growth and tax revenue.

The nonpartisan Congressional Budget Office, or CBO, estimated in 2018 that the cuts would add more than $1.2 trillion to the debt through the 2022 fiscal year, even after accounting for increased economic growth.

The Center on Budget and Policy Priorities, a think tank, estimated that from 2001 through 2018, tax cuts and the additional interest costs of borrowing to finance them added up to $5.6 trillion — or about one-third of the additional debt the government had incurred at that time.

The CBO projects that the US government will run trillion-dollar deficits over the next 10 years, resulting in a cumulative deficit of $20.3 trillion between 2024 and 2033.

Deficits are not cheap. The federal government pays interest on its debt. It was $476 billion in 2022 and is projected to rise to $1.4 trillion by 2033. This year, the federal government will spend more on net interest costs than on Medicaid and Social Security programs.

Agencies contributed to this story.