Has the US Congress Started Spending More on Interest Debt Service Than on Military Expenditures?

Has the US Congress Started Spending More on Interest Debt Service Than on Military Expenditures?

Traditionally, the allocation of funds in the federal budget between debt service and military spending has been a topic of significant debate in the United States. Recently, there has been a shift in how these funds are allocated, with some arguing that the interest on national debt may now surpass defense spending.

Debt Accumulation and Tax Cuts

Much of the national debt has been accumulated through tax rate reductions without corresponding spending cuts. In fact, Republicans have long been supportive of tax cuts. However, it's worth noting that significant military spending, especially during the Iraq and Afghanistan Wars under President George W. Bush, was primarily funded through borrowing rather than tax increases or spending cuts.

Primary Sources of National Debt

According to the Congressional Budget Office (CBO), a major source of the US national debt has been the funding of tax cuts to the wealthy under presidents Reagan, George H. W. Bush, and Donald Trump. Prior to Reagan, the bulk of the debt was used to fund wars, especially during World War II and the Cold War.

Economic Factors Influencing Interest Debt Service

An analysis of the federal budget reveals that interest payments on the national debt are set to exceed military spending this year. However, this comparison is made on an annual basis due to the variation in interest payments being tied to coupon maturities and the roll-off of bills, whereas military spending varies more monthly based on specific items purchased during a given period.

On a technical basis, the United States has already exceeded military spending with interest payments, although this status will not officially be confirmed until the end of the current fiscal year. It's important to note that debt is incurred for general purposes and not for specific projects. Congress provides appropriations for government activities, including wars, as well as tax authorizations at certain rates. When spending exceeds tax revenue, the government borrows the remainder. This borrowing is not tied to specific projects but rather to a fixed schedule that meets the government's financing needs.

Budget Allocation and National Priorities

Despite the recent trend, a large portion of the budget still goes towards healthcare and social security, which combined make up about 53% of the government's budget. Military spending, although significant, is not the largest single item. Currently, military spending accounts for 13% of expenditures, while debt service accounts for 6%.

Therefore, while there has been a significant increase in the national debt due to factors such as wars and tax cuts, the current allocation of federal funds still heavily prioritizes other areas, such as healthcare and social security, over military spending.