U.S. Congress, President Obama must halt deficits

Out-of-control borrowing is about to catch up with the federal government. According to a report last week in The New York Times, interest payments on the federal debt could exceed $700 billion annually in as little as 10 years - that's much more than the combined federal budgets this year for education, energy, homeland security and the wars in Afghanistan and Iraq, the paper reported.

The projections - provided by the White House - should serve as a very clear warning for the federal government to curtail its spending.

Now!

That means Congress and President Barack Obama should abandon efforts to impose what amounts to an expensive tax on energy with their cap and trade proposal. It also means that whatever health-care reform plan Congress hopes to pass needs to either be abandoned or passed without adding to spending, deficits or taxes. It further means that Congress needs to abandon its spendthrift ways and begin looking for places to cut government spending rather than increase it.

The blame for the soaring deficits doesn't rest solely with the current administration - though this administration has exacerbated the problem with the $787 billion stimulus package that, thus far, has had little real impact on the economy.

Instead, it sits with this and previous administrations for spending as if the nation's taxpayers had bottomless pockets and for failing to shore up entitlement programs like Medicare and Social Security that are verging on bankruptcy and will put an even greater strain on taxpayers in the very near future. Medicare, for example, will be bankrupt in as little as eight years.

A confluence of events led by the economic collapse are to blame for the mountain of interest payments that could hit by 2019. Current interest rates - near zero - are so low they have numbed the pain of debt payments. But as the economy begins to improve and as potential buyers of federal securities are drawn to other higher-return investments, interest on federal debt will increase.

Even if the federal government reins in its spending, debt payments will soar because of the increasing interest rates on a national debt that exceeds $12 trillion. According to the report, an increase of just 1 percent in the Treasury's average cost to borrow would mean another $80 billion a year.

If the government, as the White House has suggested, borrows another $3.5 trillion over the next three years, the situation will be even worse.

The bottom line is this: What has been seen as an inevitable, but distant climax to the nation's reckless spending may well be at hand.

It's time for Congress and the administration to finally take seriously the notion that the country is spending at an unsustainable rate. The result needs to be painful but necessary cuts and a delay in implementing new spending initiatives that are desired by certain constituencies but unwise in the current environment.

It's time for someone in Washington to begin making the difficult decisions that are needed to head off what could be a financial catastrophe for the federal government and, by extension, all American taxpayers.

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