What You Need To Know About Biden's Budget
STEVE INSKEEP, HOST:
Today, President Biden releases his budget, a set of spending priorities that paint a picture of what matters to his administration. Some budget documents have been leaked, and it appears the budget would take the United States to its highest sustained levels of federal spending since the Second World War. The president wants to address big problems, like poverty and climate change, not to mention the pandemic.
Now, this budget is not likely to become law as it is, but it is part of the debate, so let's discuss it with Maya MacGuineas, who is president of the Committee for a Responsible Federal Budget, which has advocated long-term budget changes over time to bring things more into balance. Maya, good morning.
MAYA MACGUINEAS: Good morning.
INSKEEP: We have talked over the years from time to time about your group's efforts to bring down deficits and deal with long-term expenses like Medicare, Social Security and so forth. But it seems to me that balanced budgets are out of style.
MACGUINEAS: Oh, I think balanced budgets are way out of style, and we're not going to see a balanced budget anytime soon. I think the goal these days is could we get to a point where the debt's not growing faster than the economy? Which is kind of a warning sign. And though we don't know the details of the budget yet, it doesn't seem like this budget is going to get us there at all. So we still have a lot to do on the front of being more willing to pay for the spending we want to have.
INSKEEP: As someone who is fiscally conservative, would you acknowledge that there is a need in this particular historical moment for the federal government to be spending a lot?
MACGUINEAS: Well, this past year, there was a tremendous need to be spending a lot and borrowing a lot because the COVID pandemic is exactly the time you do want to be borrowing. But the problem was recklessly we borrowed for many years building up to that. And it appears that this budget plans on borrowing it looks like upwards of $15 trillion over the next decade. Most of that is what's already been on the books. Some of it is the new big expansion of government. And once the economy's stronger, it's not the time to keep borrowing. It's actually the time to start to get that debt more under control. So I think more is going to have to be done. One thing we know for sure, Medicare and Social Security have real challenges on the horizon, and any responsible budget needs to figure out how to rebalance those programs so the trust funds are able to cover promised benefits.
INSKEEP: Let me ask about something that's being debated right now. The president proposed to spend a couple trillion dollars over time on infrastructure. Republicans have responded with a proposal to spend less. The president had wanted to cover the expenses with new taxes. Republicans seem to be rejecting that for the moment. But can you just talk to me about the impact of infrastructure? Is infrastructure spending an investment that makes money for the country over time?
MACGUINEAS: So infrastructure spending is something I would say is long overdue. We have had a budget in this country that has focused much more on consumption than investment. We need to be looking at things like infrastructure, human capital, many of the things that are in the budget. However, claims that infrastructure will pay for itself just aren't true. They fall into the category of wishful thinking, the same thing we've heard when people have argued that tax cuts will pay for themselves, which they also won't. So to the president's credit, he has talked about paying for his new initiatives. Now he doesn't get the full way there. There are still huge deficits in his new proposal of expansionary spending. But I think it's really important that the administration has put out the metric that we do want to pay for these new proposals. And that actually helps the economy because you're not loading it with more debt, which has a lot of negative consequences for growth over time.
INSKEEP: You talked about sustainable debt. I mean, you said you don't want the debt to be growing faster than the economy. How far are we from that at the moment?
MACGUINEAS: We are quite far. We probably need to have - if we were going to just keep the debt from growing above where it is, which is already basically at record levels, about to be at record levels, you're going to need to save about $4 trillion. We haven't had savings in that realm in a long, long time. So the right first start is what the White House is saying is let's start paying for everything new. But to be realistic and direct, we need at least a medium-sized debt deal to start structurally rebalancing the budget because we have been borrowing to pay most of the bills, much of the bills, for many of the past years.
INSKEEP: Maya, thanks. It's always a pleasure talking with you.
MACGUINEAS: Yep. And enjoy budget day.
INSKEEP: OK, indeed. Maya MacGuineas is president of the Committee for a Responsible Federal Budget.
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