It’s no secret that policymakers in Washington are having a hard time getting things done. The high-profile health care fiasco was the latest in a growing list of breakdowns. Members of Congress went home for their August break without any notable accomplishments this year.
They will need to turn things around soon as they face critical matters in which failure would have serious consequences, such as passing a federal budget, agreeing on government spending in order to avoid a government shutdown, and raising the debt limit in order to avert a national default. Fortunately, there is a way forward.
Our partners at the Committee for a Responsible Federal Budget unveiled “A Mini-Bargain to Improve the Budget.” It proposes concrete ideas for a responsible budget that would pave the way for keeping the government open, addressing the debt ceiling, and reforming taxes.
The framework has six parts:
- Replace the automatic spending cuts of sequestration with realistic and responsible discretionary spending caps, fully offset with $400 billion of savings from measuring inflation properly.
- Strengthen Pay-As-You-Go (PAYGO) to facilitate responsible tax reform that at the very least does not add to the debt on a conventional basis. Rather than cutting taxes, policymakers should enact tax reform, which could help grow the economy and generate $400 billion of deficit reduction.
- Enact bipartisan mandatory savings to save $400 billion over ten years with reforms to some of the largest drivers of the debt, including health care and retirement programs.
- Establish a Social Security commission tasked with averting the 23 percent across-the-board cuts looming in 2034 and ensuring sustainable solvency.
- Increase the debt ceiling to avoid a default on the national debt.
- Reform the budget process to increase efficiency, improve accountability, and include a long-term focus.
This approach will not replace the need for a comprehensive debt reduction plan. As the paper states, “This plan will not fix the debt, but it could easily save $1.2 trillion over a decade.” And it could save nearly $4 trillion over two decades.
Cutting through the gridlock and reducing the national debt would definitely be movement in the right direction.
National Debt and You