By Kevin Henning
For the “Progressive Views” column, Boerne Star, February 17, 2024
The Federal deficit is $34 trillion and currently growing at a rate of $1.7 trillion per year. We are spending over 23% of GDP and only taking in revenue of 19%. The debt continues to grow regardless of which political party is in power. The Congressional Budget Office (CBO) forecasts that without action, annual federal spending will grow from 23% to 30% of GDP by 2050 while revenue stays about the same at 19%. Current interest spending is about $800 million—almost as much as the defense budget. Spending on interest will exceed all other budget categories in 30 years. Social Security Trust Funds will be insolvent in about 10 years. We are on an unsustainable path to say the least. It is high time to address this problem and establish a debt commission with a mandate to set us on a fiscally responsible path.
The Peterson Foundation, most fiscal policy experts, and the Committee for a Responsible Federal Budget (CRFB) are all calling for the creation of a bipartisan fiscal commission to address the debt crisis. In addition to developing a plan, it would focus on educating the American people about our poor fiscal health. The goal would be to get the voters to give politicians the courage to take the necessary steps. According to former elected officials Leon Panetta, a Democrat, and John Kasich, a Republican: “Only when the public truly understands the problem, presented in stark unbiased terms, will they coalesce around solutions and move Congress to embrace responsible fiscal policy.”
Over time there have been many bi-partisan debt commissions. The Simpson-Bowles 2013 plan was immediately rejected by all but a few elected officials. The plan required pain for all by increasing revenue, reducing expenditures, and by tackling entitlement spending. Few politicians have the courage to tackle tough issues because they are worried about voter backlash and losing their grasp on power. American heroes like Liz Cheney and Adam Kinzinger are exceptions to the norm. They both lost their seats in Congress by fighting to save democracy. Folks like this are all too rare so it will require the American voter to bring political sanity back in general and specifically to force our politicians to be fiscally responsible.
Policy experts believe that the commission must be designed to cut through our political dysfunction. The makeup should be bipartisan and comprised of outside experts and members of Congress committed to working across the aisle. They must be compromise-seekers. They must look at the entire budget and develop a balanced plan with revenue increases and spending reductions. Experts in the area of educating the public should have leading roles because public support and buy-in will be the only way to success. We must assure that Congress and the administration will take the effort seriously.
There are many potential solutions and the sooner they are implemented the less burdensome they will be. Unfortunately, there is no solution that doesn’t involve pain. If we have the will, we can chart a better course leading to stabilized debt and more prosperity and opportunity for all Americans.
Looking at the deficit in the broadest terms, we can get to balance by increasing revenue from 19% to 21% of GDP. This can be done without increasing tax rates by eliminating some deductions, preferences, and credits. We must bring spending down from 23% of GDP to 21% or less which can be done by freezing domestic and defense spending, reforming healthcare, and putting Social Security on a solid footing. Examining the history of tax rates, we see that top personal and corporate federal tax rates are less than half what they were in the 1960s, so yes, corporations and the wealthiest among us can and should give up some of their tax breaks. This is tough medicine and I don’t see anything here that will be popular but we must devise a plan to ensure our future economic survival.
To learn more, check out the Kendall County Democratic Party website: www.kcdems.us
Kevin Henning is a local Democrat.
