Policymakers Added $2.2 Trillion to the Debt in 2019
With Congress finishing up appropriations for Fiscal Year (FY) 2020, including additional provisions that will add $500 billion in debt over the next decade, legislative action for the calendar year has just about wrapped up. The year-end appropriations bill is the second major deficit increase to be signed into law this year; after it is signed, legislation enacted this year will add $2.2 trillion (including interest) in debt over the next decade.
The bulk of this increase is the Bipartisan Budget Act (BBA) of 2019, which raised discretionary spending caps for FY 2020 and 2021 by $320 billion and adds $1.7 trillion to projected debt levels over the next decade after accounting for future years' spending. This week's bill costs $500 billion, from permanent repeal of the ACA's "Cadillac tax" on high-cost health insurance plans, the medical device tax, and the tax on health insurers, as well as reviving "tax extenders" that expired in 2017, continuing other tax breaks expiring this year, and other smaller policies. Our $500 billion estimate includes the scored deficit impact, plus interest, but does not include the cost of any spending gimmicks.
Smaller contributors to the $2.2 trillion increase include an additional $18 billion in disaster relief enacted in June for the damage caused by wildfires, hurricanes, and storms, and $10 billion to permanently authorize the 9/11 Victim Compensation Fund. With interest, this other legislation will add $34 billion in debt over the next decade.
With an unsustainable fiscal outlook and trillion-dollar deficits returning this year, lawmakers need to pay for new tax and spending policies. Doing so would at least keep our debt outlook from getting worse.