$5 Billion for a Border Wall? Who Cares?

aerial photography of great wall of china
Photo by Colin Schmitt on Pexels.com

Federal budget deficits are set to increase rapidly this year and over the next four years….      

Congressional Budget Office

The partial government shutdown over border wall funding is just one more distraction from the real issues that will worry the next generation of American voters. After the 2017 tax cuts and spending increases, the nonpartisan Congressional Budget Office estimates that the 2019 budget deficit will be $981 billion–$5 billion for the wall is only 0.5% of the deficit and only 0.1% of the total budget.

CBO estimates that if we do nothing different with taxes and expenditures, federal debt will balloon from $21 trillion today to $34 trillion by 2028. At their projected 3.4% interest rate, U.S. tax payers will have to come up with $1.2 trillion in interest each year–money that might better be spent on education or infrastructure. That is the real issue we should be worried about.

Issues like the wall dominate our attention like a barking dog at the door while the house is burning down. If we really cared about the long-term health of the country, Democrats might say, “Sure we’ll give you $5 billion for the wall in exchange for tax and budget legislation that gets our deficits under control.” Having a Congress split between Republicans and Democrats is the best time to get the right balance between spending cuts and tax increases.

Looks Like Social InSecurity To Me….

Our political leaders have known about the looming financial crisis for Social Security for decades, but never get it fixed. With the ratio of workers to retired people getting smaller and smaller as the Baby Boomers retire, it is only going to get worse. Should we just leave the problem for the next generation of voters? The Congressional Budget Office just estimated that the cost of our shortfall will be 4.4% on taxable wages–for the next 75 years (report). Wonder how our kids and grandkids will feel about that?

Being a conditional optimist, I think a window is opening up to fix this because we are entering a period of divided government with the Democratic takeover of the House of Representatives. Most members of Congress, most of the time, are motivated to claim credit and avoid blame. The realistic fixes for Social Security–raising payroll taxes, limiting benefits, raising the age of retirement, shifting to another funding mechanism–all involve being blamed for making some people unhappy. The neat thing about divided government is that you can divide the blame. We have a president who wants to do big things and a Congress that can neutralize the blame by dividing it–if not now, when is the next time we can save Social Security?