WASHINGTON – Sens. Mike Lee (R-UT) and Rep. Michael Cloud (R-TX) today led 34 of their colleagues in sending a bicameral, bipartisan letter to the House and Senate Budget Committees requesting that they direct the Congressional Budget Office (CBO) to begin including debt servicing costs whenever they produce an official cost estimate. The letter also highlights the high interest costs of deficit spending, especially in light of emerging inflation threats.
The letter reads in part:
“Our nation’s outstanding public debt recently surpassed $28 trillion, as reported by the Treasury Department on May 10, 2021. It was only a year and a half ago that the U.S.’s outstanding public debt reached $23 trillion. Those numbers are in fact, troubling, but the amount that we are spending just to service that debt, is also alarming. In Fiscal Year 2020, net outlays for interest totaled $345 billion or 5.3 percent of total spending, according to the CBO. While CBO estimates that historically low interest rates are keeping net interest outlays low, that could dramatically change and impact our nation’s spending in key areas.
“In fact, that change may come sooner than CBO expected. On May 12, 2021, the Bureau of Labor Statistics announced that inflation had grown by 4.2 percent over the last year, ‘the largest 12-month increase since…September 2008.’ Well before the inflation announcement was made, CBO had been estimating that net interest costs ‘would exceed other mandatory spending by 2030, exceed all discretionary spending by 2043 and surpass spending for Social Security by 2045.’ If such inflation is sustained, interest rates will rise and rapidly advance the timeline in which debt servicing eclipses all other spending. This data should cause Congress serious concern over our total spending, as well as the spending associated with servicing that debt.”
Read the full text of the letter here.