Ahead of the annual congressional scramble to piece together a federal budget—a process that will begin in earnest after President Joe Biden’s state of the union address next week—a bipartisan group of lawmakers are asking a question that’s rarely part of the proceedings these days.
We don’t know how we are going to be able to cover all of this.
In a letter sent on Tuesday, 24 members of the House of Representatives called on Speaker of the House Nancy Pelosi (D–Calif.) To take small, but crucial steps to control America’s uncontrollable national debt. The letter highlights the fact that policies enacted during the past five years—including pandemic relief, but also “Congress’ perennially broken budget process and fiscal policies”—have added $13 trillion to the projected levels of debt in 2031, at the end of the 10-year window Congress uses for budgeting.
The lawmakers sent a letter to Pelosi stating that it had been more than ten years since Congress passed any legislation which significantly addressed long-standing structural issues or improved the nation’s fiscal outlook. Our national debt must be addressed by both sides and should be considered a priority.
Although the letter does represent the views of 24 members of the House, it is not the entire 435. Still, AnyIt is a good idea to discuss the issue of debt and how it can be addressed.
America’s national debt surpassed $30 trillion in March. Projections indicate that this figure will rise both as an absolute number and as a percentage to the country’s economy over time. CBO predicts the US’s debt to be double the size by 2051. The Government Accountability Office (GAO), however, projects that it will reach four times that size before the year ends. These projections are not able to account for possible future recessions, epidemics, and other unexpected costs.
Veronique de Rugy, and Jack Salmon from the Mercatus Center publish a report titled “U.S. Fiscal Policy Today is Not Sustainable.” Our future budgetary outlook looks even worse than it is. Not only is the debt ratio at its highest point in peaceful history but so is our overall peacetime record.
Some lawmakers have called on Pelosi’s leadership to act because of the $30 trillion symbolic debt limit. Another factor is America’s current high level of inflation. You can read more about it here. There are reasons As previously mentioned, rising inflation and high levels of debt can lead to policymakers falling into a trap. A higher level of inflation could force the Federal Reserve (Federal Reserve) to increase interest rates. This would raise the amount owed on debt.
Whatever the reason, 24 legislators signed the letter this week asking for the creation of two low-hanging fruits policies. The first is to request the establishment of a bipartisan commission on debt, similar in structure to the one that President Barack Obama used during his first term. It helped reduce the annual deficits due the Great Recession.
The commissions can be used by lawmakers as a way to appear they are performing something, even though it is not. However, in this instance, it may prove useful. Since the inception of deficit and debt politics, it has taken so many years for Congress to consider whether there’s a viable coalition that can address this issue. A commission may help organize and focus those debates—and may raise further awareness among voters.
This second option is slightly less concrete. Pelosi is being asked by the lawmakers to make changes in the budget to the way the debt ceiling works. These proposed modifications would enable the president to unilaterally raise the debt limit, provided that Congress passed a budget resolution containing certain debt-reduction steps for the current fiscal year. The president could still unilaterally raise the debt limit, but Congress would be allowed to repeal it within 30 days.
It’s yet another delegation of congressional authority to the executive, but Rep. Scott Peters (D–Calif.), one of the members to sign this week’s letter to Pelosi, says the upshot is an end to political brinkmanship over the debt ceiling—a recurring showdown that often features a government shutdown but that does not accomplish anything in terms of debt and deficit policy.
Remember that raising the debt limit is not equivalent to adding debt. The Treasury can borrow funds from the Treasury only to cover spending approved by Congress. Objections to increasing the debt ceiling amount to little more than a refusal to pay overdue credit card bills—a temper tantrum that doesn’t address the actual problem of overspending.
Bipartisan debt commissions and adjustments to the debt ceiling will not fix America’s fiscal crisis, however they are “commonsense” ideas that “would be significant steps in the correct direction,” said the Committee for a Responsible Federal Budget. It is a nonpartisan advocacy group for reducing America’s deficit.
These are the steps that the nation will need to take sooner or later. Pelosi was notified by the legislators that they owed it to their children “to recognize our nation’s unsustainable financial trajectory and to work with each other across the aisle over time to correct it.”