Five Facts on America’s Precarious Budget
America’s national debt now exceeds $33 trillion and interest payments on that debt reached over $600 billion in fiscal year 2023.
With another government shutdown looming on Friday, Nov. 17, here are Five Facts that highlight how important it is for America to get its fiscal house in order:
- In the past five decades, Congress has only passed its annual spending bills on time through the regular process four times.
What’s more, as Pew Research points out, the last three times that Congress passed a budget on time (fiscal years 1989, 1995 and 1997), lawmakers were late in passing the budget “blueprint” that is supposed to come before the actual spending bills.
- Social Security will be unable to pay full benefits within a decade.
The Social Security trust fund is set to deplete by 2033. If Congress does not find new revenue for Social Security or reform how it pays benefits by then, it would result in a benefit cut of 23 percent, equating to an annual income drop of approximately $17,400 for a typical dual-income couple retiring that year.
- Our national debt could be twice the size of our economy by the middle of the century.
The nonpartisan Government Accountability Office projects that by 2050, public debt will rise to 217 percent of GDP, from around 100 percent at the end of fiscal year 2021, indicating a trend of spending far outpacing economic growth.
- The yield on the 10-year U.S. Treasury bond stands at 4.49 percent as of November 8.
This is more than double the average of yield in 2019, the last year before the pandemic-induced financial crisis, and reflects not just the growing U.S. debt but also the escalating cost of servicing that debt, as benchmark interest rates climb in response to inflationary pressures and fiscal policy concerns. The change over the past year alone signifies a rising expense burden for the federal budget, reinforcing the urgency for strategic fiscal management.
- Interest payments on the national debt have nearly doubled since the start of the decade.
The United States has seen its interest payments on the national debt nearly double in just three years, ballooning from $345 billion in 2020 to $659 billion in 2023. This marks a stark increase from 1.6 percent to 2.5 percent of gross domestic product. The Committee for a Responsible Federal Budget recently estimated that if interest rates remain higher than expected, interest on the debt could cost upwards of $13 trillion over the next decade.
