By David Morgan
WASHINGTON (Reuters) -The ongoing shutdown debate between Democrats and President Donald Trump’s Republicans is largely avoiding the difficult fiscal issues clouding the country’s future – the rising national debt and the long-term financial health of Social Security and Medicare.
The fifteenth partial federal government shutdown since 1981 has been sparked by Democrats’ demand for spending, which would cost about $1.5 trillion over the next decade according to the nonpartisan Committee for a Responsible Federal Budget, adding to the nearly $38 trillion national debt.
“We have huge real problems in this country, and we are stuck in a perpetual messaging war between the two parties, instead of real attempts to fix these divisions and divides and do something to deal with our fiscal problems,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates for deficit-reduction.
The Senate has now voted repeatedly on dueling funding packages, including a bill passed by the Republican-controlled House of Representatives and backed by Trump that would reopen federal agencies at recent funding levels through November 21. But Democrats favor their own legislation, which would ramp up spending mainly for healthcare.
There has been little or no discussion about how to reduce the nearly $2 trillion federal deficit.
Most government shutdowns over the past 44 years have involved fiscal issues such as spending, deficits and the need for a balanced budget. But since the start of Trump’s first term in 2017, the government has now shut down three times over social issues including immigration and healthcare.
The current standoff is centered on $1.7 trillion in funds for agency operations, which amounts to only about one-quarter of annual federal spending.
In the meantime, independent analysts warn that the U.S. finds itself in a deteriorating fiscal position, with debt growing faster than the economy, interest payments on debt crowding out spending for programs and financial weakness threatening social trust funds for the elderly.
MULTIPLYING DEBT
The national debt has risen from $5.67 trillion to $37.88 trillion over the last quarter-century, increasing steadily regardless of which party held sway in the White House and Congress. Interest on the debt alone now exceeds $1 trillion per year, more than what the U.S. government spends on defense, and Social Security and Medicare are due to run short of funds in 2033, which could trigger across-the-board cuts for beneficiaries.
Republican leaders including House Speaker Mike Johnson have warned about the debt impact of higher spending in the shutdown debate. But most Republican rhetoric has focused on “radical” Democratic priorities, rather than fiscal health, while Democrats have ignored the fiscal issue altogether and blamed Republicans for increasing the deficit by enacting Trump’s tax-cut and spending bill.
The Trump bill is expected to add $4.1 trillion to the deficit over a decade, according to the Congressional Budget Office, which also forecast that the cost could be offset by an estimated $4 trillion in new revenue brought in by Trump’s tariffs.
“I think Donald Trump would spend any amount for whatever it takes to advance his personal interest,” said Senator Ron Wyden of Oregon, top Democrat on the Senate Finance Committee.
SOME DEFICIT HAWKS REMAIN
A handful of Republican fiscal hawks have voiced the need to rein in federal spending. Senator Rand Paul of Kentucky has voted repeatedly against the Republican funding bill, saying the measure – like the Democratic version – would add to the debt.
Others agree but view the government shutdown as part of an organized effort by party leaders and appropriators to maintain control of spending decisions and avoid the politically difficult choices that come with deficit-reduction.
“To the outside world, this looks dysfunctional. But this is a very well-honed process,” said Republican Senator Ron Johnson, who has proposed legislation to end shutdowns and wants federal spending reduced to levels seen before the COVID pandemic.
“What you’re seeing right here, the shutdown showdown, this is the magician’s shiny object. Look over here! Look at this! Don’t look at the $37 trillion we’re in debt,” the Wisconsin Republican told reporters.
Republican Senator Roger Marshall said he hopes that Republican control of the White House and both chambers of Congress can eventually facilitate a reduction in federal spending to about $6.4 trillion as a first step toward balancing the budget.
“It’s a political shutdown,” the Kansas Republican told Reuters. “My goals, Republicans’ goals, are to keep the government open and work towards a responsible budget. But nobody wants to hear that.”
What it could take to make the debt and deficit center-stage is unclear, with some Republicans thinking that mounting economic pressure from the debt could eventually turn the tide.
“We’re sleepwalking into a debt crisis,” said Jessica Riedl, senior fellow at the right-leaning Manhattan Institute. “The real pain may not be felt for several years, but the decisions made today all but guarantee that we will not avert the debt crisis.”
(Reporting by David Morgan, additional reporting by Nolan D. McCaskill in Washington; Editing by Scott Malone and Matthew Lewis)
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