WASHINGTON – U.S. Senator Bob Corker (R-Tenn.), chairman of the Senate Foreign Relations Committee, convened a hearing Wednesday to examine the strategic challenges mounting national debt poses for the United States. As interest on the debt and spending on entitlement programs increasingly crowd out available resources for other priorities, the United States will face difficult choices in order to maintain economic growth and defend American interests at home and around the world. According to the Congressional Budget Office’s (CBO) March 2016 projections, the U.S. debt is $15 trillion and expected to rise to $23.6 trillion in the next ten years. The 50-year average of debt as a percentage of the U.S. economy or gross domestic product (GDP) is 38 percent. Today the U.S. debt-to-GDP ratio is 74 percent—in other words, the federal debt is equal to nearly three quarters of what the entire American economy produces in one year.
“The issue of our national debt has been an issue that our top military officials, presidents on both sides of the aisle, secretaries of state on both sides of the aisle, have considered to be a major threat to our nation, and it certainly limits our ability to respond to crises,” said Corker. “I think that it’s bipartisan in the sense that we’ve got to figure out a way to come together and grind through the issues that our nation is facing to ensure that we don’t continue with the generational theft that is occurring right now where we in essence run deficits that future generations will pay.”
In testimony, Richard Haass, a former top State Department official and foreign policy expert, warned of a “slow motion” crisis in which the United States, through long-term inaction, is eventually forced to implement severe remedies for reducing unsustainable debt levels that would harm American prosperity and security. He further identified a variety of strategic risks for the U.S. from this scenario: higher interest rates to finance U.S. debt, diminished resources for investment at home or abroad, reduced flexibility to respond to unforeseen security and economic events, instability created by the absence of U.S. leadership internationally, and the potential demise of the U.S. dollar as the reserve currency of the world.
“Our inability to deal with our debt challenge will detract from the appeal of the American political and economic model,” said Haass. “It will make others less likely to want to emulate us and more wary of depending on us as it will raise questions about this country's ability to come together and take difficult decisions. The result would be a world that is less democratic and increasingly less deferential to U.S. concerns in matters of security.”
Click here for complete witness testimony and archived video footage.
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