The United States spent more than $300 billion last year on interest alone for its national debt, and the costs increase each year as the now $30 trillion deficit grows. The massive outlay is not taken into consideration, however, by the Congressional Budget Office when it considers the cost of new federal programs, leading to vast underestimates in its influential reports.
The CBO, which advises lawmakers on the costs of legislation, estimates that annual interest costs on the national debt will hit nearly $1 trillion in a decade. More than 40 Republican lawmakers led by Texas congressman Michael Cloud are demanding that the CBO include these costs in all future legislative budget estimates, noting the interest payments were 5 percent of total federal spending last year.
"Historically high inflation rates will lead to higher interest rates, which will rapidly advance the timeline in which debt servicing eclipses other spending," the lawmakers, including Sens. Mike Lee (Utah), Ted Cruz (Texas), and Marsha Blackburn (Tenn.), wrote in a letter obtained by the Washington Free Beacon and sent on Wednesday to the House and Senate budget committees. "When Congress does not understand the true cost of a proposal, it is more likely to make decisions that endanger our ability to address future needs."
The letter comes as the national debt this year surpassed more than $30 trillion and inflation hit a 40-year high. Economists attribute these figures largely to the increased government spending amid the pandemic. Lee said it is impossible for Congress to get exorbitant spending and inflation under control if future budgets do not portray the actual cost.
"The cost of paying interest on the federal debt is growing along with Biden's disastrous inflation," Lee told the Free Beacon. "The problem is neither Congress nor the American people can accurately predict what the debt servicing of new spending will cost."
A CBO spokeswoman told the Free Beacon that the agency's formal estimates do not include interest costs, but the office provides a tool that produces a general estimate of interest payments for a given bill.
President Joe Biden claimed his $2 trillion American Rescue Plan, which Congress passed last year, would not contribute to inflation. But a March study published by economists at the Federal Reserve Bank of San Francisco found the massive legislative package contributed to a 3 percentage point increase in inflation.
"Nations can rise and fall due to fiscal responsibility," Cloud told the Free Beacon. "Due to Democrats' continued mass spending, inflation continues to rip through America's economy at historic levels."
Update 2:42 p.m.: This piece has been updated with comment from the Congressional Budget Office.