Washington’s deficit addiction is imposing severe costs on the American people. As investors demand greater compensation for holding federal debt, higher Treasury yields put upward pressure on mortgage rates and other borrowing costs, while inflation pressures build. Amid deteriorating fiscal conditions, Republicans are considering another massive debt-limit increase chiefly to spare President Donald Trump difficult negotiations with Democrats should they take control of either or both chambers this November.
While Republicans and President Trump inherited an unsustainable fiscal situation, they chose to make it worse.
The last time Republicans raised the debt limit in a single, party-line vote was July 2025 as part of the One Big Beautiful Bill Act (OBBBA). While Republicans raised the debt limit by $5 trillion, they increased deficits by $4.1 trillion (including interest), as the bill’s tax cuts far exceeded the $1.1 trillion in net spending reductions they enacted over 2025–2034.
And because many of the spending reductions were backloaded, there are serious concerns whether they will be allowed to go into effect, as Republicans have already advanced a farm bill that would delay a portion of those savings, potentially setting them up for repeal later.
Republicans also authorized additional deficit spending since then. In June, they enacted another $69.5 billion for immigration and border enforcement, again using reconciliation to advance their priorities. If only their demonstrated willingness to assemble narrow majorities for more spending extended to deficit reduction!
To sum up their fiscal record thus far: Republicans authorized trillions more in borrowing while enacting policies that made substantially more borrowing necessary.
Now they are considering another debt limit increase during the post-election lame-duck session, repeating the OBBBA playbook and pairing new spending with higher borrowing. Alternatively, Republicans could attach a debt limit increase to the December 11 government funding deadline, striking a deal with Democrats to increase nondefense spending in exchange for more defense spending and a debt limit increase to avert a government shutdown before Christmas. In either case, a debt limit increase this lame duck could perpetuate fiscal irresponsibility rather than begin to address it.
Some Republican senators are showing reservations. According to media reports by Punchbowl News and The Hill, Sen. Thom Tillis (R-NC) wants assurances of fiscal responsibility, Sen. Cynthia Lummis (R-WY) is reluctant to support another increase, and Sen. Ron Johnson (R-WI) and Sen. Rand Paul (R-KY) want spending reductions included in a reconciliation package. Opposition matters because Republican leadership has few votes to spare. The question is whether they will produce enforceable reforms or simply postpone difficult decisions with another round of uncertain spending-cut promises.
The case for another debt-limit increase cannot simply be that the previous one is running out, nor that doing so avoids a political confrontation with Democrats. The last party-line debt limit increase looks to have provided about two years of borrowing authority and the next one of similar size is projected to merely last past Trump’s presidency. The prospect of exhausting another $5 trillion in borrowing authority so quickly should prompt legislators to examine why Washington keeps borrowing so much.
The answer is simple: Social Security and federal health care programs run on autopilot, expanding under current benefit formulas and financing arrangements that Congress is reluctant to revisit. An aging population and built-in benefit growth fuel entitlement cost growth, while rising interest expenses compound the burden of past borrowing. Rather than confront these commitments, Republicans have added new spending and tax cuts without sufficient offsets.
Throwing fuel on the debt fire only ensures the flame grows even bigger.
Rising entitlement spending, mounting interest costs, and politically convenient fiscal decisions have produced a federal deficit of nearly $2 trillion in fiscal 2026, or 6.2 percent of GDP. These are crisis-level deficits normally only seen during recessions or major emergencies like the pandemic.
The costs reach far beyond Washington. Persistent federal borrowing competes with private investment and puts upward pressure on interest rates, making it more difficult for families to afford a mortgage, a car loan, or to build or expand a business.
Rising deficits also fuel inflationary pressures. Americans are already struggling to keep up with rising prices. Heather Long, chief economist at Navy Federal Credit Union, notes that inflation has erased the average worker’s wage gains since April and voters are not happy about it. Meanwhile, President Trump has suggested that inflation could reduce the debt burden. “You know, inflation. Certain levels of inflation will also pay off that debt very rapidly. Very rapidly,” he recently told Time.
Inflation does not make government obligations disappear. It reduces the purchasing power of the dollars used to repay them, shifting costs onto households whose paychecks and savings buy less. Congress should confront the spending commitments driving federal borrowing instead of leaving Americans to pay for them through higher prices.
Republicans should make any debt-limit increase contingent on enacted spending reforms that meaningfully reduce deficits and thus ease interest rate and inflationary pressures. They could begin by adopting a deficit reduction path that slashes borrowing in half, aiming for deficits of no more than 3 percent of GDP, as recently discussed at a House Budget Committee hearing.
Congress has ample options to reduce spending toward that target, including restructuring Medicaid’s open-ended federal financing, reducing Medicare subsidies for affluent beneficiaries, and cutting federal subsidies for activities states and the private sector should finance. The upcoming lame-duck session could be Republicans’ last chance to use reconciliation to enact reforms with a simple majority and address the unsustainability of federal finances.
The President is signaling that Republicans should expect legislative gridlock if Democrats take control of Congress. Fiscal conservatives should insist on changing the course for the country.