The national debt issue is closely intertwined with tax reform. Both have become a responsibility that largely falls on younger Americans, such as many Suffolk students, some experts say.
Suffolk University senior Gina DeMatteo is a politics, philosophy, and economics major who has worked at Grant Thornton, LLP as a public policy and government affairs intern where she has researched tax policy.
“Students are probably thinking about how they will have to pay off their loans after college, but not how it will effect the next generation of workers,” she said. “You hear the media say the debt is high, but not a lot of visibility of how it effects you.”
Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB) explained at a “Fix the Debt Campaign” presentation on Monday in D.C. that the immediate impacts of not addressing the national debt will not be recognized. The long-term effects, however, hurt younger generations the most, according to MacGuineas, which may lead to an unhealthy economy and lower-paying jobs in the long run.
In April, Treasury Secretary Steven Mnuchin explained that the Trump administration is committed to tax and regulatory reform that would spur economic growth. Mnuchin also expressed concern that if tax reform does not happen by the end of 2017, there will be immediate negative impacts on the economy.
“To the extent we get the tax deal done, the stock market will go up higher,” said Mnuchin in a Politico podcast in mid-October. “But there’s no question in my mind that if we don’t get it done, you’re going to see a reversal of a significant amount of these gains.”
MacGuineas projected in a TIME Magazine op-ed earlier this year that “the President’s plan could add over $5 trillion to the national debt over the next decade.”
Similarly, the Center on Budget and Policy Priorities, a non-partisan financial policy institute, estimated that tax cuts made during President George W. Bush’s administration in 2001 and 2003 added $1.4 trillion to the national debt.
U.S. Department of Commerce data from October has shown that the U.S. debt now exceeds gross domestic product (GDP). Pew Research Center pointed out that the nation’s financial situation is most comparable now to how it was immediately following World War II.
“In the overall scheme of things, I understand that the government can keep piling up debt, and there’s nothing holding them accountable for slowing their spending,” said DeMatteo.
A Suffolk University/USA Today poll in March indicated that only 22 percent of voters believe,“policymakers should take steps to control the growing costs of Social Security and Medicare,” programs that contribute to the deficit.
Data from Real Clear Politics right before the last midterm elections showed that 82 percent of voters think debt is an important issue when considering congressional candidates.
This dichotomy could reveal two distinct understandings. First, the national debt could influence voters in the 2018 elections, and second, that while voters seem to care about the national debt, they are not willing to forgo entitlement reform in order to address the debt.
CRFB data from October shows that in fiscal year 2016, the federal government spent 24 percent of the budget on social security, a federal benefit system for retired and disabled workers. Another 26 percent of the budget was spent on Medicare and Medicaid, the Children’s Health Insurance Program (CHIP), a program that Congress failed to renew this year, and the Affordable Care Act.
As these costs have continued to rise, Congressional leaders on both sides of the aisles agree that entitlement reform is necessary as a means to combat the national debt.
Mick Mulvaney, Director of the Office of Budget and Management, described, in a mid-October interview, a conversation where Trump “promised people [he] wouldn’t change Social Security.”
Former Secretary of Labor and expert of income equality Robert Reich explained in a recent Huffington Post editorial that entitlement reform has only temporary effects.
“Social Security won’t contribute to future budget deficits. By law, it can only spend money from the Social Security trust fund,” said Reich.
MacGuineas argued that the traditional structure, paired with an aging population, should be a concern for young people, and said that the national debt is a reflection of “how broken our government has become.” MaGuineas also expressed that little will be resolved without bipartisan support; something Congress sees little of these days.
“Write to your representatives and your senators,” said DeMatteo. “Be aware of what’s coming up in Congress to remind them that they reflect their constituents’ opinions, and college students count too.”
