Category Archives: Debt and deficits

What Senate candidates say about debt, Social Security

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Tom Cotton, Hallie Shoffner, Jeff WadlinWhoever wins this year’s U.S. Senate race in Arkansas will take the oath of office amidst unprecedented fiscal challenges. 

The national debt has surpassed $40 trillion, equal to about $117,000 for every American. The government is spending more than $2 trillion more than it is collecting this fiscal year. 

Meanwhile, the Congressional Budget Office projects that Social Security’s retirement trust fund will become insolvent in mid-2032. This will occur before the end of the senator’s upcoming term. The result could be 26% benefit cuts for recipients unless Congress takes action.

What do Arkansas’ three U.S. Senate candidates – Republican Sen. Tom Cotton, Democrat Hallie Shoffner and Libertarian Jeff Wadlin – think about these issues? I asked them, and here’s what they said.

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About those $5,000 ‘Trump dividend’ checks

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social Security cutArkansas’ members of Congress reacted cooly to President Trump’s proposal to send a $5,000 “Trump dividend” to every adult American if Republicans retain their congressional majorities this November.

None of the five who answered questions explicitly endorsed the proposal, though they avoided directly criticizing it. 

In the Senate, Sen. Tom Cotton’s spokesperson said he “wants to put money back in the pockets of working Arkansans by continuing to lower taxes.” Sen. John Boozman’s office said he is “certainly interested in helping keep as much money in the American people’s pockets as possible” and looked forward to hearing more details. 

In the House, Rep. French Hill said the focus instead should be on implementing lasting policies such as his recently passed 21st Century ROAD to Housing Act along with Republican-passed tax reforms. Similarly, Rep. Bruce Westerman supports longterm policies encouraging business growth, good wages, reducing bureaucracy and regulations, lowering taxes, and reforming health care. Rep. Steve Womack said he had not seen the full proposal but had “concerns.” Rep. Rick Crawford did not respond to a request for comment. 

All of those but Boozman are up for re-election this year. Of the five, Cotton and Hill have the most competitive races.  Continue reading →

National debt reaches $40 trillion

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social Security cut, $40 trillion national debtForty trillion dollars. That’s how big the national debt has become as of Wednesday, August 19.

The debt reached that $40 trillion milestone less than five months after hitting $39 trillion. At this rate, it will hit $50 trillion in six years, according to the Peter G. Peterson Foundation. 

The numbers are so big that it’s hard to wrap one’s head around them, so here’s some perspective: Forty trillion dollars is equal to roughly $116,700 for every American man, woman and child. It took almost 200 years for the national debt to reach $1 trillion in 1981; it’s grown $39 trillion in the ensuing 45 years. 

Much of that growth has come since the turn of the century. In fact, the debt has doubled in less than 10 years. 

Last year, the federal government spent $1.78 trillion more than it collected. Government deficit spending now comprises 5.8% of the U.S. economy. Can you imagine where the economy would be if we weren’t “borrowing” from our grandchildren? Continue reading →

We’re not going to balance the budget

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social Security cutLet’s be honest: The federal government probably will never balance its budget again, so eventually there will be a debt crisis. Times will be harder, and Uncle Sam will not be able to bail us out.

More evidence backing this bleak outlook came July 21, when the 10-year Treasury yield reached 4.6%. By July 29, it was 4.641%.

The 10-year Treasury note is one of the ways the federal government finances its borrowing. Investors in the United States and in foreign countries purchase the bonds and then receive interest on their investment. 

Who pays for that interest? Today’s taxpayers – and tomorrow’s. The higher the yields, the more taxpayers pay. While today’s amounts are not particularly high by historical standards, they’re 60% higher than the 2.8% percent average over the last decade. Continue reading →

Will Arkansans see $430 Social Security cut?

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social Security cutIf Congress doesn’t act, the average Arkansas retiree could see a Social Security monthly benefit cut of $430 in 2032, based on findings from the nonpartisan Committee for a Responsible Federal Budget.

More than 19% of the state’s population, or 589,427 Arkansans, could be affected, including retirees, survivors and dependents. Arkansas could lose somewhere around $3 billion, which would be 1.6% of its economy. That percentage is the eighth highest among all the states.

All of that’s according to a new interactive tool, “No State Spared,” on the CRFBs website at www.crfb.org/nostatespared.

The reduction would occur because the Old-Age and Survivors Insurance Trust Fund is set to become insolvent in the fourth quarter of 2032. 

That’s the funding mechanism that pays Social Security benefits to senior citizens and their survivors. Another Social Security trust fund for disabled Americans is in good shape for at least the next 75 years.

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