If, in the year 2028, the US needs to fix a bridge or combat a potential recession, Uncle Sam might have to dig around in the Treasury Department's couch cushions. That's because the US is on track to need much more money to pay off interest on its debt, meaning funds for everything else—ie, Medicaid, kids' programs, and even the military—will end up "getting squeezed," C. Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Center, tells the New York Times. "It's very much something to worry about." The interest cost expected for next year, per Congressional Budget Office calculations: $390 billion, a 50% hike from 2017's $263 billion. And within 10 years: $915 billion a year, or 13% of the federal government's spending. "By 2020, we will spend more on interest than we do on kids, including education, food stamps, and aid to families," a budget advocacy expert says.
Medicaid and Defense Department budgets will also be surpassed by the cost of interest within the next five years. Interest rates that have been gradually rising over the past few years have made borrowing more steep, but so have the tax cuts the Trump administration passed last year, as has the spending-heavy budget bill greenlit earlier this year. The Times explains the "soaring" deficit is exacerbating things, as government borrowing typically has decreased during recession recoveries—meaning there was, in the past, a little more wiggle room when the economy once again weakened. Not the case now, experts warn. "There will eventually be another recession, and this increases the chances we will have to slam on the brakes when the car is already going too slowly," one Harvard economist notes. (More national debt stories.)
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