According to the nation's treasury data, the national debt is currently at $32.03 trillion. The Congressional Budget Office estimates the country's deficit for the fiscal year 2023 to be near $1.4 trillion, driving the national debt even higher.
The debt ceiling deal, which also included tens of billions in spending cuts demanded by Republicans in the House of Representatives, will allow the government to borrow whatever it wants until the end of 2024 when the debt ceiling suspension ends.
When the bill was signed into law earlier this month, the national debt was just around $31.47 trillion. On the first business day after the debt ceiling was suspended, federal borrowing surged by nearly $400 billion.
According to Fox News, the national debt will just keep on growing as long as the federal government keeps spending more than it collects.
"In the first eight months of the current fiscal year, the government has already spent $1.2 trillion more than it collected," wrote Peter Kasperowicz for Fox Business. "Annual budget deficits of $1 trillion or more are expected in the foreseeable future under current law."
Meanwhile, President of the Committee for a Responsible Federal Budget Maya MacGuineas said the "only thing more disheartening" than skyrocketing national debt is the "fact, we reached $31 trillion last October."
"We can't even get through a single fiscal year anymore without adding a trillion dollars in debt and $33 trillion is likely just around the corner," she added. "Our debt addiction saddles the next generation with a debt burden that only grows larger so long as we insist on ducking the hard choices of governing. We need a return to responsible fiscal policy if we're ever going to get ourselves out of this mess."
MacGuineas also presented a simple formula for fiscal responsibility: "No new borrowing – meaning fully offset all new spending or tax cuts – and better yet, hold off on them until our debt is under control; address the drivers of our runaway debt; and reform our broken budget process."
The House of Representatives has started to adopt government spending targets for the next fiscal year that are below the level agreed upon by Biden and House Speaker Kevin McCarthy.
According to reports, the House Appropriations Committee voted 33 to 27 along party lines to adopt a discretionary spending level of $1.47 trillion for the fiscal year 2024, which starts on Oct. 1. That is about $120 billion below the $1.59 trillion set out in the debt ceiling bill negotiated by Biden and McCarthy. (Related: Lawfare with Tom Renz: There is nothing good about debt ceiling deal between Biden and McCarthy – Brighteon.TV.)
Reuters reported that targets would maintain defense spending at the $866 billion level agreed in the debt ceiling legislation. But it would lower spending on the environment, public assistance and foreign aid. It would also increase spending for border security, drug enforcement and countering the threat posed by China.
"The debt ceiling bill set a ceiling, not a floor, for fiscal year 2024 bills. The allocations before us reflect the change members on my side of the aisle want to see," said Appropriations Committee Chairperson Rep. Kay Granger of Texas.
Meanwhile, Democrats did not agree with the policies that Republicans attached to the spending bills, such as one that would prevent an abortion drug from being distributed through pharmacies.
Also, lower spending levels could make it harder for the House to reach an agreement with the Democratic Party-led Senate. According to analysts, federal agencies may have to shut down if the two chambers cannot agree on spending levels by October.
"They're moving toward a shutdown. That's what they seem to want to guarantee," said Rep. Rosa DeLauro, the top House Democratic appropriator. GOP Rep. Steve Womack also expressed concern about a shutdown. "I worry about what's going to happen on Oct. 1."
Watch the video below where ITM Trading Chief Market Analyst Lynette Zang talks about the impending debt crisis.
This video is from the What is Happening channel on Brighteon.com.