The federal government is ending 2019 with a national debt of over $17 trillion for the first time in U.S. history – and if one includes intragovernmental debt, such as that held by the Social Security trust funds, this figure rises to $23 trillion. Beginning in 2020, the government is projected to add more than $1 trillion to the debt every year in perpetuity. Amid this rising tide of red ink, is anyone willing to fight for fiscal responsibility?
Certainly not President Donald Trump. Since taking office three years ago, Trump earned his crown as the self-proclaimed king of debt by signing into law a $2 trillion tax cut and shattering spending caps created under President Obama. Congressional Republicans – the same folks who demanded these caps be imposed in the first place – had no qualms about charging these costs to the national credit card. After eight years of lambasting deficits under President Obama, most Republican deficit hawks have revealed themselves to be nothing more than peacocks.
Thankfully, there is some leadership on the other side of the aisle. When Democrats retook control of the U.S. House of Representatives earlier this year, Speaker Nancy Pelosi reinstated pay-as-you-go (PAYGO) rules requiring legislation that cuts taxes or increases automatic spending to be fully offset. Although not all of her caucus supports PAYGO, the moderate House Blue Dog Coalition – which spearheaded the push to bring back the rule after it was repealed by Republicans in 2011 – has rebuffed efforts to waive PAYGO, sending a clear signal that at least some Democrats oppose digging the nation’s fiscal hole deeper.
But stopping digging is only the first step to getting out of the hole. Our annual budget deficit, currently the largest among developed nations, is already on track to grow faster than the economy. Thanks to changing demographics and a shrinking ratio of workers to retirees, the costs of federal health-care and retirement programs are increasing faster than the revenues needed to finance them. As deficits rise, the trust funds that credit Social Security and Medicare with past surpluses will run down, leading to across-the-board benefit cuts when they exhaust within the next 15 years absent Congressional action before then.
Washington must adopt a new fiscal policy that strengthens public investments in the foundation of our economy, modernizes federal health and retirement programs to reflect an aging society, and creates a pro-growth tax code that raises the revenue necessary to support these critical government functions. Reps. Ben McAdams (D-UT) and Ed Case (D-HI), co-chairs of the Blue Dog Task Force for Fiscal Responsibility and Government Reform, introduced three bipartisan bills last month that could help move the federal budget in that direction:
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The TRUST Act: The Time to Rescue United States’ Trusts (TRUST) Act would create separate congressional committees tasked with developing legislation to restore solvency to each federal program that has a looming trust fund insolvency. If a package of recommendations gets support from a majority of committee members, including at least one member of each party, the recommendations would receive expedited consideration in Congress. Although somewhat limited in scope, if these committees were successful in rescuing every covered program without deficit spending, the national debt would be stabilized as a percent of gross domestic product. The bill is co-sponsored by Reps. Case, McAdams, Mike Gallagher (R-WI), and William Timmons (R-SC). Sens. Mitt Romney (R-UT), Joe Manchin (D-WV), Todd Young (R-IN), Doug Jones (D-AL), and Kyrsten Sinema (D-AZ) have also introduced identical legislation in the U.S. Senate, making this proposal both bipartisan and bicameral.
The Sustainable Budget Act: This bill, sponsored by Rep. Case and Rep. Steve Womack (R-AR), the ranking member of the House Budget Committee, would create a National Commission on Fiscal Responsibility and Reform tasked with putting the federal budget on a path to achieve balance (excluding interest payments) within 10 years. The commission would be comprised of six presidential appointees (of which only four could be from the president’s party), three appointees each from the leaders of both parties in the House and Senate, and two bipartisan co-chairs appointed by the President. If 12 of the commission’s 18 members – including at least four of each party – reach consensus on recommendations, those recommendations would receive fast-track consideration in both the House and Senate.
The RAFT Act: The Reforming America’s Fiscal Toolkit (RAFT) Act, sponsored by Reps. Case, Womack, and Tim Burchett (R-TN), would require Congressional budget resolutions to set a target for federal debt as a percent of GDP and create two mechanisms for achieving the necessary savings. One option is to direct authorizing committees to develop a package of policies for hitting a certain savings target. Each committee’s package would be combined into one comprehensive bill that would receive expedited consideration in Congress and require only a simple majority to pass the bill in both the House and Senate. The other option would create a 16-member Joint Select Committee on Fiscal Responsibility comprised of appointees each from the leaders of both parties in the House and Senate. If a majority of both parties on the committee vote in favor of recommendations, those recommendations would also receive expedited consideration in Congress.
Each of these three proposals has different strengths and weaknesses, and none are likely to become law so long as Donald Trump sits in the oval office, but they all serve to start a conversation about the kinds of tax and spending policies necessary to solve our nation’s fiscal challenges. At a time when Congress is considering deepening our debt binge with up to $1 trillion in additional tax cuts, and some presidential candidates are proposing tens of trillions of dollars in new social spending without credible plans to pay for them, it’s a conversation that couldn’t be starting soon enough.