Main National Debt Driver
U.S. Senator Patty Murray (D–WA) claims that the “single biggest driver of our national debt for the last 25 YEARS have been Republican-led tax cuts.”
IN FACT, federal taxes have consumed a roughly level percentage of the U.S. economy for more than 60 years, and the main driver of the national debt is actually increased spending on social programs. Here are the specifics:
- Since 1960, federal revenues in every decade have averaged 17% to 19% of the U.S. economy with no upward or downward trend.
- In contrast, federal spending has risen from 18% of the U.S. economy in the 1960s to 24% over the most recent decade with a definitive upward trend and a spike to 31% during the Covid-19 pandemic.
- Over the same period, federal spending on social programs has risen from 21% of all federal outlays in 1960 to 60% in 2024 with a steep upward trend and a spike to 74% during the Covid-19 pandemic.
- Social programs — which provide healthcare, income security, education, nutrition, housing, and cultural services — are mostly mandatory programs in which spending continues indefinitely unless Congress and the president pass new laws to change the status quo.
- Thus, the Congressional Budget Office projects that even though taxes will remain above the historical average for the coming decade, increased spending on mandatory programs and interest on the debt will cause the national debt to grow “well above the previous record.”
- In total, social programs and interest on the national debt currently account for about 76% of all federal spending.
- Contrary to media outlets that blame the national debt on military spending, federal outlays for national defense and veterans’ benefits have plummeted from 53% of all federal expenditures in 1960 to 17% in 2024.
- Contrary to media outlets that blame the national debt on tax cuts, most “tax cuts” are actually “tax evens” that correct for “bracket creep” that consumes an ever-growing share of people’s incomes over time due to tax laws that aren’t indexed for inflation or wage growth.
- Murray cites no source for her claim, but it accords with a 2024 study by the Committee for Responsible Federal Budget that places all tax cuts into one bucket while splitting the added spending into three buckets.
- When all of the spending is placed into one bucket, the study shows that added spending accounted for 61% of the growth in debt from 2021 to 2023, while tax cuts accounted for 37%.
- More importantly, the study states that the figures above don’t account for the “effects of the built-in spending growth in certain parts of the budget, while it takes for granted the built-in growth in revenue.”
- That methodology overstates tax cuts by ignoring the effects of bracket creep, and it understates added spending by excluding the soaring growth of mandatory social programs.
- Putting aside the study’s methodology, it still conflicts with Murray’s claim that “Republican-led tax cuts” are to blame for the debt, because the study states that “77 percentage points of debt-to-GDP can be explained by legislation with some meaningful level of bipartisan support,” “while highly partisan Democratic actions explain 12 percentage points, and highly partisan Republican actions explain 8 percentage points.”
