The first time the projected deficit topped $1 trillion, the economy was in the midst of the Great Recession, and Barack Obama had been president for seven days. As the economy recovered, the deficit receded by 70 percent, and for a time, it seemed like some fiscal sanity might be on the horizon in Washington.
Today, over a year into the Trump presidency and after 90 consecutive months of job growth, the economy is in good shape overall, but our fiscal picture is in its worst shape since World War II.
According to the Congressional Budget Office's new report released Monday, the federal deficit will top $1 trillion in just two years. And it won't just be in 2020. The CBO projects trillion-dollar deficits and a ballooning national debt far into the future.
In its report, the CBO says the debt could equal the size of our entire economy by 2028 and continue rising. In a strong economy, this is not an immediate crisis. However, this level of debt limits our options in a future recession, and it is likely already serving as a serious drag on economic growth.
That's because debt levels this high can cause a continuous, but hard-to-detect, slowing of the economy. And in just a decade, interest payments on the debt could be over $900 billion annually. Like a family redirecting this year's income to pay the credit card bill for last year's expenses, every dollar we spend paying for our massive debt diverts money away from priorities like education, scientific research and our military.
Congress has consistently failed to deal with this reality. Worse, many of our nation's leaders simply use the debt as a political weapon — an easy excuse to oppose the other party's priorities, when convenient.
President Trump and the Republican Congress are only the latest offenders, passing a deeply flawed, partisan tax bill, slashing revenue while the economy is still strong — which is exactly when we should be strengthening our nation's balance sheet. Even with its budget gimmicks and fantasy economic growth projections, the new law will add over $1 trillion to the debt by 2028.
Even in the absence of any credible evidence, Republicans continue to claim that the tax law will pay for itself. Instead of making the case to the American people that a $1 trillion debt increase is necessary to have lower corporate and individual tax rates, Republicans have simply decided to deny that their actions have consequences.
Neither party's hands are entirely clean. Many Democrats have long refused to acknowledge that programs we believe in — Medicare, Medicaid and Social Security — are significant drivers of long-term deficits.
With the Affordable Care Act, which was fully paid for and actually reduced the deficit, Democrats had reclaimed the mantle of fiscal responsibility. Over time, however, many Democrats — along with Republicans — have removed some of the law's most effective revenue sources and cost-control mechanisms.
For years, I held out hope for a bipartisan "grand bargain" to put us on a more sustainable fiscal path. Together with a handful of like-minded Democrats and Republicans, we envisioned a plan that could cut the deficit by up to $4 trillion through reasonable limits to discretionary spending, bipartisan tax reform that raised revenue by closing loopholes and smart reforms to major health and retirement programs.
But responsible efforts to control the deficit have withered, and the ideas that have taken their place are much worse.
For example, the automatic spending cuts known as the "sequester" were indiscriminate cuts to important investments in our economic growth and competitiveness, not to mention our military.
The balanced budget amendment Congress will vote on this week would inevitably cause more indiscriminate cuts and tie our hands in the event of a future recession, war or other national emergency.
And Republican attempts to repeal the Affordable Care Act would have simply dumped healthcare costs onto families and state budgets to claim fictional savings.
Slashing investments, shifting costs or tying our hands will not solve our problems. The way to stabilize our debt is to improve revenue and make smart reforms to our entitlements that secure their sustainability and effectiveness. But there's little hope of such progress until we have an honest approach to the debt in Washington.
That means members of Congress must be straight with the American people: Tax cuts and spending plans cost money; the debt is doing subtle-but-real damage to the economy and there are smart ways to make it better, but they are not easy.
It also means voters should demand an honest accounting when elected representatives run up the debt — every time, not just when it's politically convenient.
Sen. Warner, a Democrat, is the senior senator from Virginia and sits on the Finance, Banking, Budget and Rules committees and is vice chairman of the Select Committee on Intelligence. He was the state's governor from 2002 to 2006.