Photographer: Luke Sharrett/Bloomberg

Missing From 2016 Race: More Urgency Over U.S. Budget Gaps

  • Public concern about deficits is well off its 2013 high
  • Without deadlines, Americans get complacent on fiscal future

In almost every stump speech, Republican presidential candidate John Kasich mentions his six years on the House Budget Committee and his work to produce a budget surplus. He brings a national-debt clock to town halls. He talks about his responsible stewardship of Ohio’s finances as governor, too. And that’s the only state he’s won.

Americans don’t care about the federal budget the way they did just three years ago. According to the Pew Research Center’s annual survey of policy priorities, 56 percent of adults in the U.S. said in January that reducing the budget deficit was a "top priority." That share peaked at 72 percent in 2013. Though there is a partisan gap -- since Barack Obama began as president in 2009, Republicans have cared more than Democrats -- the downward trend is consistent across parties, ages and education levels.

That decline has been mirrored in this year’s campaign. Back in 2012, candidates in the final Republican debate brought up the federal debt or deficit 15 times; five of those came from Mitt Romney, who won the nomination. In this year’s most recent Republican debate, it came up eight times, most of those from Marco Rubio, now out of the race. Only one came from Donald Trump, who last month stepped back from a promise to pay down the federal debt within two terms. In the most recent Democratic debate, the word “debt” was preceded by the word “student” every time.

QuickTake U.S. Budget Deficit

The national debt has stabilized -- for now -- and the deficit has shrunk as a share of gross domestic product. These happy facts have a potentially hazardous side-effect: public indifference. According to the nonpartisan Congressional Budget Office, if Congress and the White House do nothing, toward the end of this decade the debt will begin climbing again. But there is no immediate emergency.

"Congress got burned out on the deficit," said William Hoagland. "We still have the lowest interest rates, the economy is not tanking, we’re not in recession." 

Hoagland is a senior vice president at the Washington-based Bipartisan Policy Center. Talk about the budget "waxes and wanes," he said. "We’re in a waning period. It’s just not a winning topic." 

Hoagland served on the Senate Budget Committee in the 1980s and ’90s, and then as budget director for Republican Majority Leader Bill Frist in the early 2000s. He believes that, on an issue as intangible as the federal debt, concern moves from Washington outward -- if politicians don’t fret, the country doesn’t either. 

‘Grand Bargain’

In the first Obama administration, Hoagland said, some legislators held out hope of a “grand bargain,” a fix that would displease everyone equally. It never materialized. 

“The shift after the fix-the-debt bust was to refocus on incremental change,” and that’s even harder, he said. Small changes displease only small groups, who can mobilize more easily to head off legislators. Politicians either hope for a big solution that thwarts resistance, or they try not to talk about one at all.

Diane Lim, an economist at the Committee for Economic Development who worked on congressional budget committees in the late 1990s and early 2000s, said she believes Americans don’t think about deficits or the debt unless they have a deadline. In 2012, when public concern about the budget was higher, Congress faced a decision to extend a series of tax cuts. 

Now that most have been extended, “there are no impending tax increases to get worked up about,” she said. “So politicians aren’t screaming about it, and real people don’t have it on their radar.”

There’s some evidence for this. Electome, a project of the Massachusetts Institute of Technology’s Media Lab, has logged tweets about the U.S. election since early 2015, classifying comments by subject. As a share of this conversation, the subject “budget/taxation” has shown a clear decline, with three spikes. Each coincides with a deadline, such as an expiring debt ceiling. Americans don’t like to talk about the federal budget unless they absolutely have to.

“The fact that we are hanging on and still actually doing quite fine,” Lim added, “has actually done a bit of disservice to the issue.” The federal budget deficit was 2.5 percent of GDP in 2015, down from 9.8 percent in 2009. And interest rates on U.S. debt are at historic lows, making it cheaper to finance.

This picture won’t always look as rosy. The Congressional Budget Office estimates that under current law, the deficit will swell to almost 5 percent of GDP in 10 years, due in part to higher interest rates and rising costs for an aging population. This will push the federal debt held by the public to 86 percent of GDP over the same period, a level many economists believe puts significant drag on economic growth.

No Deadlines

“To expect voters to know about the demographic bubble may be asking them too much,” said Jim Kessler, a former legislative aide now at Third Way, a group that develops ideas for moderate, left-leaning policies. He doesn’t see any compelling deadlines in the near future. “We have some fiscal cliffs,” he said, “but they’re not the same as the ones we had in 2012, where you had a trillion dollars worth of tax cuts expiring.”

Lim doesn’t see any looming deadlines, either. She’s now working on a project to show Americans how line items in the federal budget are connected to their weekly pay stubs. Future projections are too abstract, she said. 

Talk of the deficit and debt have become "boring," wrote Steve Bell in an
email. Bell, who has served as the staff director of the Senate Budget
Committee, is the Bipartisan Policy Center’s senior director of economic
policy. "We have been warning that the debt would lead to higher interest rates
and it hasn’t yet," he wrote, "we warned that America’s debt would wound our
economy, and it hasn’t palpably done so yet.”

Hoagland believes there will be a renewed focus.

"I’ve been at this for so long, I can’t get disheartened," said Hoagland. "We have to be prepared for the next time leaders say ’Let’s do something about this.’"

Before it's here, it's on the Bloomberg Terminal. LEARN MORE