Budget panel warns rising interest costs are crowding out spending as lawmakers debate $7 trillion in tax cuts and deep Medicaid cuts

WASHINGTON — Witnesses at a House Budget Committee hearing on May 7 told lawmakers the federal government’s fiscal trajectory is unsustainable as interest costs climb and deficits remain large, and lawmakers sparred over whether the solution should be deeper spending cuts or more pro-growth tax policies.

“Interest payments on our national debt now surpass the entire defense budget,” said Dr. Joshua Rao, senior fellow at Stanford University’s Hoover Institution, in opening testimony. Rao warned that rising interest costs could consume a growing share of federal revenue and leave little left for defense or domestic programs.

The hearing brought economic forecasters, think‑tank researchers and market analysts before the committee. Dr. Paul Winfrey, CEO of the Economic Policy Innovation Center, described the nation’s fiscal position as “so fragile that unless Congress acts decisively, we will collide with a self‑inflicted debt spiral.” Don Schneider, deputy head of U.S. policy at Piper Sandler, and Michael Linden, senior policy fellow at the Washington Center for Equitable Growth, echoed warnings that continued borrowing at current rates would crowd out private investment and push up borrowing costs for households and businesses.

Committee members repeatedly returned to a…