America's Talking - U.S. Spending on Interest Tops National Defense, Medicare

Episode Date: May 18, 2024

Congress has spent more money on interest so far this year than it has spent on both national defense and Medicare. Spending on net interest hit $514 billion in the first seven months of fiscal year 2024. That's more than spending on both national defense ($498 billion) and Medicare ($465 billion). Medicare is the federal health insurance program for those 65 and older and younger people with disabilities. During the same time period, the U.S. spent $873 billion on Social Security, the federal program that provides retirement, disability, survivor, and family benefits to more than 67 million Americans. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hello and welcome to America in Focus, powered by the Center Square. I'm Dan McAelib, chief content officer at Franklin News Foundation, publisher of the Center Square Newswire service. We are recording this on Friday, May 17th. Inflation remains elevated. The border crisis continues. Sometimes violent protests continue to rage over U.S. involvement in Israel's ongoing war with Hamas. There's the ongoing criminal cases against former President Donald Trump. Questions about President Joe Biden's age.

and mental capacity. All of these issues will be key factors in the build-up to November's presidential election. One issue that isn't getting as much attention is the ballooning U.S. national debt. Joining me to put our nation's debt into perspective is Casey Harper, Washington, D.C. Bureau Chief for the Center Square. Casey, we reported at thecentersquare.com this week that the federal government has spent more on interest payments on that debt this year than it has on both national defense and Medicare. Give us the details and why it should matter to voters. Yeah, you're right, Dan, this issue, particularly in the last few years, has accelerated. We've known for years that the national debt is a big problem. It's getting worse.

But really since COVID, the deficit in particular, of course, I know you know, but the deficit is how much money we're borrowing annually, whereas the debt is the total amount of debt that we have nationally. The deficit has been, it's spiked in COVID, and now it's still, it's over a trillion dollars a year now, which before 2020, the deficit had never topped a trillion. And it was less than a trillion dollars. So when, you know, this isn't like, oh, this issue has been going on for a long time, which is true. It's not just that. It's actually sped up and how fast it's getting worse. And that has implications. So what are some of those implications? You alluded to it. But this is just an incredible fact that U.S. spending on the interest is surpassing national defense and Medicare. So, you know, holding this, debt has a real cost. It has the cost that we are, you know, we're spending more just holding the debt on interest payments to some of our biggest priorities. National defense, you know, is about $500 billion. Medicare is $465 billion, but interest is $514 billion in the first seven months of the

fiscal year so far. So, I mean, that is a kind of an incredible statistic, especially, Dan, you know, we've been hearing for how long that Medicare and Medicaid, you know, Medicare, you know, There's insolvent. Social Security, that we can't fund Social Security. It's going to disappear any year now. Your kids aren't going to get Social Security. And yet we're spending more on the interest payments than we are on these government programs that we're told we can't afford it anymore. Yeah. And the numbers are kind of shocking, as you read them, in terms of how much the U.S. is paid in interest compared to these other budget lines, Casey. And of course, that interest is only, can continue to grow as the debt grows.

We're at $34.7 billion, or excuse me, trillion with a T, $34.7 trillion and counting, I'm looking at the U.S. debt clock right now. We're going to be at $35 trillion, probably before the end of Sunner, and it's continuing to grow. So those interest payments that we're going to need to make are going to continue to grow unless the federal government, you know, gets spending under control. But, Casey, this is not an issue that's been at the forefront, at least not yet, of the presidential election. Do you think the presidential candidates, Biden and Trump specifically, should be talking more about the federal debt and how these interest payments are essentially squeezing out spending on other federal programs? Yeah, I mean, it is a very difficult issue for politicians to talk about.

It used to be the Republican mantle to hold up fiscal responsibility. And I really went out the window under George Bush and the Iraq War. when deficits really took off. Now, of course, you know, both Democrats and Republicans have been guilty of runaway spending. But the paradigm in the past was that Democrats were more loose with spending and Republicans were fiscally responsible. But in many ways, Republicans have set aside that mantle of fiscal responsibility. And then it was hard to argue for it during, for instance, you know, the Great Recession. I mean, is that really the time to buckle down and say, no, I guess not? And then COVID came along and who's going to, which politics?

is going to argue for cutting spending during COVID. So we keep having these crises where no one wants to be the politician on the right or the left to say, now is the time to get our fiscal house in order. And it's just, it's snowballed, right? And so politically it's very difficult to talk about this issue because the follow-up question, Dan, is, so do you want to cut Medicare, which is like a third rail for both parties? Oh, do you want to cut, you know, Medicaid? Do you want to take health care away from poor families?

So those are the immediate follow-up questions. and they make very potent attack ads. And so it's very hard for these politicians to say that they're going to cut spinning because immediately whatever your favorite pet program is, you feel personally threatened and they're going to cut that. If somebody gets, and then if you want to cut defense, you know, you don't want to protect America. So anything that you say you want to cut, it gives political fodder for all your enemies.

But American people should care. I think a lot of Americans care, even if it's, elected officials are afraid to talk about it because the national debt right now is, to put this in perspective, is well over $100,000 per person. So, I mean, if we were to pay, meaning if we were to pay off the debt, every American would have to contribute more than $100,000 to pay off the debt. Yes. And then this time next year, they would still, because of the deficit, they would still have already

added another trillion dollars in debt, right? because they didn't get their fiscal house on order and didn't stop the spending. Every American, Dan, you could take that sizable chief content officer salary and pay $105,000 donation to the IRS, which I know you're excited to do. If we all did that, then yes, the debt would mostly disappear. But in one year's time, we'd already have about a trillion dollars in debt again because of the rate the government is spending. But let me get my checkbook out, Casey. Yeah. And I'll do my part. Yeah, kidding, of course.

Casey, do you, I mean, the president and former president this week agreed to two debates. Whether those debates actually take place, we'll see. But do you expect them to get any questions about the debt and what to do about it during these debates? I'd be surprised if they do. Yeah, I mean, people are really concerned about the Ukraine war, about Israel. and Gaza, they're really concerned about so many issues. And, you know, a lot of ways, the parties and the candidates decide what the defining issues are. Biden, his team, want the defining issue to be that Trump is a threat to democracy and that, you know, abortion. They want Trump's threat to

democracy and abortion to be the main issues. Trump wants, you know, immigration and inflation, probably and maybe a couple of others to be the main issues. And, you know, cutting federal spending just isn't popular among Democrats. It hasn't been really in a long time. and in this populist era of the Republican Party, cutting spending just never quite makes the top of the list. Well, thank you again for joining us today, Casey. Listeners can keep up with this story and more at thecentersquare.com.