{"id":26707,"date":"2018-06-26T20:37:12","date_gmt":"2018-06-26T20:37:12","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2018\/06\/26\/underwater-will-rising-debt-spark-pentagon-cutbacks\/"},"modified":"2026-08-07T22:22:20","modified_gmt":"2026-08-07T22:22:20","slug":"underwater-will-rising-debt-spark-pentagon-cutbacks","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/congress\/2018\/06\/26\/underwater-will-rising-debt-spark-pentagon-cutbacks\/","title":{"rendered":"Underwater: Will rising debt spark Pentagon cutbacks?"},"content":{"rendered":"\n

WASHINGTON \u2014 The U.S. government\u2019s annual budget deficit<\/a> is set to grow to $1 trillion in 2020 and record levels afterward, part of a gloomy economic outlook<\/a> from the nonpartisan Congressional Budget Office.<\/p>\n\n\n\n

The report comes amid military spending increases to counter Russia and China, raising the question of how those increases are compatible with the 6-month-old GOP tax cuts and the huge deficits they\u2019re expected to spawn.<\/p>\n\n\n\n

The military will be \u201churt,\u201d the House Armed Services Committee\u2019s top Democrat, Rep. Adam Smith, said Tuesday, adding that the nation\u2019s combination of tax cuts and spending increases leave the U.S. ill-equipped to economically compete with China and other major powers.<\/p>\n\n\n\n

\u201cPresident Trump and the Republicans\u2019 extremely reckless tax cuts, combined with our ongoing unwillingness to make strategic choices about how we spend our defense dollars, will end up forcing unpleasant national security trade-offs at precisely the time we are expecting increased strategic competition,\u201d said Smith, of Washington.<\/p>\n\n\n\n

\u201cWe are constantly told that we need to do everything we can to prepare for these challenges. But instead Congress has put us in a massive hole, and those deficits will hurt the military at a time when it is most problematic,\u201d he added.<\/p>\n\n\n\n

Smith has previously warned<\/a> Defense Secretary Jim Mattis that the Pentagon\u2019s two-year budget deal<\/a> may be as good as it gets.<\/p>\n\n\n\n

According to the CBO, the U.S. is at a heightened risk for another financial crisis, as debt ultimately peaks at more than 152 percent of the nation\u2019s gross domestic product. At 78 percent of GDP, federal debt held by the public at present is at its highest level since shortly after World War II.<\/p>\n\n\n\n

Republicans have credited the tax cuts and Trump-initiated deregulation with creating economic growth. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, acknowledged that sustained growth will be needed to overcome projected deficits, coupled with reductions of controversial entitlement programs.<\/p>\n\n\n\n

\u201cIf you believe that the tax cuts are supposed to pay for themselves as long as the economy is averaging over 2.8 percent, it\u2019s paying for itself,\u201d Hensarling told the Fox Business Network last week. \u201cIncreased revenue is part of the deficit solution. Ultimately, we have to reform current entitlement programs for future generations.\u201d<\/p>\n\n\n\n

Still, the CBO projects that revenues will be flat until 2026, when the individual income tax rates in the tax bill expire.<\/p>\n\n\n\n

The country\u2019s aging population and rising health care costs are driving government spending for major social safety-net programs \u2014 another source of budget pressure, according to the CBO.<\/p>\n\n\n\t