The Root of Budget Deficits in the United States: A Congressional Perspective

Amid the debate over the United States' massive budget deficits, many point fingers at the federal government's overarching spending. However, it is largely the responsibility of Congress, not the executive branch, that drives this financial imbalance. Understanding this perspective is crucial for any analysis of U.S. fiscal policy.

Understanding Congressional Spending and Deficits

For the past 70 years, Congress has consistently managed a high level of deficits, leading to a persistent imbalance between tax revenues and spending. Over this period, tax revenues averaged 17 percent of GDP, while spending averaged 19 percent of GDP. In 2023, under President Biden, this percentage has further climbed to 24 percent of GDP, the highest in history. Such high spending leads to significant debt accumulation.

Current Debt Situation

Currently, the national debt stands at approximately $35 trillion, with an alarming $1 trillion added to the deficit every 100 days. This debt growth drives up interest payments, which this year are forecast to surpass the U.S. defense budget and all social programs combined. At $900 billion, the interest burden is more than defense spending and represents a critical drain on the national budget.

Political Influence on Deficit Spending

Politicians strive to maintain their positions in power, often at the cost of the national fiscal health. This is achieved through funding “pet projects” that have little to no utility but are designed to buy votes. For instance, student debt forgiveness directly addresses the votes of students and potential parents, although it comes with significant long-term costs and unintended consequences, such as higher tuition rates.

Congressional Elections and Re-election Priorities

Members of the House of Representatives serve two-year terms, leading them to focus on re-election campaigns constantly. Among the current Representatives, over 20 have served 16 years or more, showing the relentless effort to stay in power. For Senators, the longer term of six years means they, too, are consistently focused on re-election, raising funds and making decisions politically rather than based on the national interest.

Impact of Political Pressure on Fiscal Policy

With constant pressure to win votes, it is easier for Congress to vote for spending rather than oppose it. This political orientation creates a default preference for spending over saving, even as the U.S. already has an adequate tax base. To achieve budget balance under current spending levels, significant tax increases would be necessary, likely much greater than the expected $641 billion increase from $5.082 trillion in 2024 to $5.723 trillion.

Conclusion

Ultimately, the root of the U.S. budget deficits lies in the actions and priorities of Congress. To address these issues, a re-evaluation of the legislative process and the influence of re-election cycles is necessary. While constitutional boundaries restrict the direct impact that the executive branch can have, Congress must take a more responsible stance in managing the national finances to ensure long-term stability and growth.