The House has sent a budget reconciliation package to the Senate that will add trillions to the national debt. Will the Senate’s purported fiscally conservative Republicans approve the bill?
GOP leaders made balanced budgets a governing credo for a generation. As recently as 2024, the Senate adopted a Republican resolution calling the debt “unsustainable, irresponsible, and dangerous.”
Yet now the same party is guiding a budget through Congress that would increase primary deficits by about $3.3 trillion over the next decade, far surpassing even the borrowing allowed by its own budget blueprint.
The numbers are brutal. The Congressional Budget Office estimates this year’s deficit at $1.9 trillion, with debt projected to rise from 100 percent of GDP this year to an unprecedented 118 percent by 2035. As of April, the Bipartisan Policy Center’s deficit tracker indicates a $1.1 trillion shortfall, which is 13 percent larger than the same period last year.
Furthermore, this exceptional surge in deficit financing is happening during a time of full employment and steady growth. This is unprecedented.
Interest payments on the national debt now surpass defense spending and, if projected trends continue, they will match Medicare spending within a decade. Every new dollar the government spends on interest reduces the funds available for other urgent needs.
Only two years ago, House Speaker Mike Johnson (R-La.) warned, “In the time it’s going to take me to deliver this speech, we’ll go up another $20 million in debt … The national debt is unsustainable and the greatest threat to our national security.”
The current Senate Majority Leader, John Thune (R-S.D.), echoed that alarm in 2023. “We have to find a way to rein in federal spending,” he said. “Otherwise, the size of our national debt is going to crush our economy and limit the government’s ability to meet even its most basic responsibilities.”
Yet today, the Republican-led Congress is driving the deficit and debt even higher. What explains the vanishing influence of fiscal conservatism?
Political calculus is the obvious answer. Many politicians staunchly oppose deficits when the opposing party holds power, yet downplay fiscal irresponsibility when their own party controls the government. Advocating for fiscal responsibility seems principled, but implementing fiscally responsible policies that negatively affect some of their voters suddenly appears unwise. The result is a bipartisan consensus in favor of red ink.
The repercussions of abandoning fiscal conservatism will be severe. As the debt rises, it exerts upward pressure on interest rates, limiting business investment, hindering entrepreneurship and slowing economic growth.
This connection between deficits and interest rates may be particularly pronounced under a Republican-led Congress: If the country cannot significantly reduce the deficit when self-identified fiscal hawks in control, our debt may be on an uncontrollable trajectory, one that history shows will ultimately lead to crisis, lower living standards and political upheaval.
As a sign of such concern, the rating agency Moody’s recently downgraded U.S. debt, and bond markets delivered a resounding vote of no confidence in May as Congress showed its unwillingness to address fiscal profligacy.
Furthermore, the belief that tax cuts can generate sufficient economic growth to offset the soaring debt relies more on faith and hope than on evidence. Extensive research published in leading academic journals shows that U.S. tax cuts will not produce enough revenue to cover their costs. In fact, the debt-to-GDP ratio increased steadily following the Reagan tax cuts in the 1980s, the Bush tax cuts in the early 2000s and the Trump tax cuts of 2018. This is not an argument against tax cuts, but against the idea that they can pay for themselves.
To safeguard our future, fiscal conservatives must reclaim their legacy and summon the courage to say no to their own constituents. The late Sen. Tom Coburn (R-Okla.), a steadfast fiscal hawk, emphasized his concern about the debt in 2007. “The moral question is,” he asked, “whether we are going to steal opportunity and freedom from the next generation.” His words ring truer than ever.
As Congress prepares to pass yet another budget that deepens the nation’s fiscal hole, voters deserve answers. Where have all the fiscal conservatives gone? And, more pointedly, will they ever return and shrink the deficit?
Ross Levine is the Booth Derbas/Edward Lazear Senior Fellow at the Hoover Institution and a research associate at the National Bureau of Economic Research.