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The long-term debt implications of Senate’s new 2-year budget

The Senate passed a new budget bill Thursday, delivering a rare bipartisan legislative agreement. But critics say the spending it allocates and its temporary suspension of the debt ceiling represent runaway spending and fiscal irresponsibility. Lisa Desjardins joins Judy Woodruff to discuss the huge numbers at play, who opposed the new budget and the different types of spending it reflects.

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  • Judy Woodruff:

    And now back to the budget deal we reported earlier.

    It is being hailed as a political win today, but is raising concerns about runaway debt for the United States.

    Our Capitol Hill correspondent, Lisa Desjardins, has been covering the negotiations from the very beginning. And she is here with me now.

  • Lisa Desjardins:

    Hi.

  • Judy Woodruff:

    So, Lisa, hello.

    So remind us now, what is in this deal. And then give us a sense of implications for the longer term too.

  • Lisa Desjardins:

    As you reported, Judy, the headline here is that this would raise the debt ceiling for the next two years.

    It also raises the maximum amount Congress can spend. They still have to work out how to exactly spend that money over the next couple of months. That is what we hear lot about.

    But, Judy, when you look deeper, there is so much more to say long term. And, Judy, we are going to have a lot of graphics, so get ready. This is going to be fun.

  • Judy Woodruff:

    We're ready.

  • Lisa Desjardins:

    Right. Great.

    First, let's talk about recent debt increases. This is not the only one. First of all, this is about $1.7 trillion increase in the national debt. This comes, of course, after we saw a tax cut deal in the last two years that would also raise the national debt an estimated $1 trillion to $2 trillion. That is a lot of red ink that we are adding.

    Judy, that is not the only issue here. Deficits are rising in general. And let's look at exactly how much. There we go. See the deficit rising? That is up to 2019. But let's look at the where the trend is going after this. Look at that.

    Right now, we are on course for the deficit to just continue skyrocketing over the next few years. Now, as Congress passed this budget, as we told viewers, there was a lot of applause from lawmakers. There was compromise.

    There were other lawmakers who said this is a problem. And a lot of them talked about the national debt.

    First, let's hear from Republican Rand Paul and then also Democrat Ben Cardin.

  • Sen. Rand Paul, R-Ky.:

    Many of the supporters of this debt deal ran around their states for years complaining that President Obama is spending too much and borrowing too much.

    And these same Republicans now, the whole disingenuous lot of them, will wiggle their way to the front of the trough, to the front of the spending trough, to vote for as much or more debt than President Obama ever added.

  • Sen. Ben Cardin, Md.:

    I heard a lot of my colleagues come in here and lament this agreement, saying it's going to add to the deficit.

    Some of those are the same people who voted for the tax cuts. Let's be direct about this. We have to have the revenues necessary to pay for what we incur in spending.

  • Lisa Desjardins:

    Judy, most of Congress voted for this. And they also complained about it.

    So it is almost like saying, we need to stop violence, and then immediately punching someone in the arm. Congress here is being hypocritical.

  • Judy Woodruff:

    So tell us how much of a role does this deal play, this particular budget deal play, in getting that debt number up and up and up.

  • Lisa Desjardins:

    This budget deal was about discretionary spending.

    And it's called that because that is the only kind of spending that Congress really can change year to year. So let's look at the discretionary spending. This is what Congress controls.

    Look, we will show you a line right here. So discretionary spending has been going up and down, going up a little more here. The bigger budget problem, Judy, is called mandatory spending. It's much more, a much larger percentage of the federal budget. But Congress doesn't control that. It is automatic spending.

    And it is largely two things, Social Security and Medicare. So let's look at those two. This is the spending on those two items right now, around a trillion dollars each. That is — now, in 10 years, let's look at the growth.

    Both of those, Medicare and Social Security, on trend to double or nearly double. And they are already one of the largest spending amounts, Judy. And if you look at this, Medicare, Judy, right now, it is on track to run through its trust fund in seven years.

    So if lawmakers don't deal with this, benefits will be cut.

  • Judy Woodruff:

    So is anybody in Washington who has the ability to do something about this talking about it?

  • Lisa Desjardins:

    There is actually more talk about this on Capitol Hill.

    I talked to many lawmakers, Republican and Democrat, in the last couple of weeks who say we do need to reform especially Medicare and Social Security now. But the problem is — and even Republican leaders like John Thune admitted to me — President Trump has said he doesn't want to touch Social Security and Medicare, and that that is making — meaning that they can't get to that conversation.

    One other issue on the horizon, Judy, let's just talk about the interest that we are paying on the national debt. Right now, it's almost $400 trillion. That is enough to pay for, oh, all the college tuition at every public university, national universal pre-K, and a huge increase in the military.

    That is just what we are paying on the national debt on the interest. And, Judy, that is on track to double as well in the next 10 years.

  • Judy Woodruff:

    I remember when people thought a trillion was a lot of money.

  • Lisa Desjardins:

    Right.

  • Judy Woodruff:

    We are now talking about a lot more than that.

  • Lisa Desjardins:

    We are way past that. We are really in tricky waters.

  • Judy Woodruff:

    Lisa Desjardins, thank you.

  • Lisa Desjardins:

    You're welcome.

  • Judy Woodruff:

    Appreciate it.

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