Congress Continues To Ignore Plans To Fix The National Debt In Favor Of Endless Can-Kicking

After decades of almost uninterrupted budget deficits during the COVID pandemic and unprecedented spending, the U.S. has a $31.5 trillion national debt and growing.

Congress is currently embroiled in a fight over raising the debt ceiling — increasing the amount that the federal government is allowed to borrow. Republicans claim that the federal government must reduce its spending to be able to agree to the debt ceiling. But, so far, they have not. Specific Which spending measures should be reduced?

Without a deal, there is a chance that the government will run out of money as soon as this summer. According Janet Yellen, Treasury Secretary and a Bipartisan Policy Center analysis. Many believe that failure to raise debt ceiling will result in default on nation’s debt. Even the most optimistic forecasts for the future warn of severe economic damage.

This debt battle highlights the fact that politicians of both major parties have long avoided concrete solutions to debt and spending. The Tea Party made concerns about the national debt — which stood at a retrospectively quaint $13 trillion in 2010 — one of the pillars of their movement. Except for these occasional debt ceiling battles the Republican Party has made very few policy proposals to address the problem, other than vague calls. “cut spending” It is not unlike the GOP’s current demand in relation to the debt limit fight.

Although most elected officials lack answers on the subject, there are many solutions.

The Simpson-Bowles Plan, and the Domenici-Rivlin Task Force’s plan to address the debt, are two of the most prominent plans.

The Simpson-Bowles plan was Formulated Former Republican Wyoming Senator Alan Simpson and Erskine Bowles, former Chief of Staff to Bill Clinton, were both members of the National Commission on Fiscal Responsibility and Reform.

The plan called to increase federal revenue by 21% of the GDP. In 2010, it was 14.6%. It also proposed to reduce spending to 21%. Before the coronavirus pandemic caused fiscal chaos, federal spending was 21% of GDP. Federal revenue was 16.3%. According The Congressional Budget Office. It would have been possible to get 2019 revenue at 21% of GDP. Required An increase of more than $1 trillion

Plan also recommended lowering the overall tax rate for Americans and eliminating all deductions or tax credits. The plan recommended tight caps on future spending as well as a reform of Social Security.

Domenici-Rivlin Task Force Created by the Bipartisan Policy Center in 2010 and also included a former Republican senator and former Clinton administration official — Pete Domenici of New Mexico and Alice Rivlin, respectively. The plan was similar to Simpson-Bowles in that it included several measures. However, it suggested a reduction of spending to 23% of GDP, an immediate freeze on all spending, and a thorough reforming of entitlements.

2019: The Peter G. Peterson Foundation Hosted The Fiscal Summit brought together prominent think tanks such as the American Enterprise Institute, Manhattan Institute and Center for American Progress to discuss potential solutions to the nation’s debt. While the impact each plan would have on national debt is different, the basic structure of both the 2010 and 2011 plans was the same: lower spending, increase revenues, reform the tax code, adjust entitlements, and reduce spending.

Most every plan that can be used to reduce or eliminate the nation’s debt will incorporate some combination of these measures. There are however, some actions that can help to reduce the debt.

Federal revenue could be increased by a drastic increase in legal immigration. According to theory, more people mean higher demand for goods or services. Growing The economy and the tax revenue it generates, and these new taxpayers will help to boost entitlement programs such as Social Security. The immigrants also Start Businesses can earn twice as much as natural-born Americans, so accepting highly skilled immigrants that would most likely pay more taxes may be a way to increase revenue.

The labor force participation rates are still Low After the pandemic shock, there is an acute shortage of highly skilled job applicants. Filling these positions with immigrants who will then pay taxes might be an effective strategy.

To quickly increase revenue, the U.S. government could also decide to sell federal land. Bureau of Economic Analysis Estimate The total value of federal land within the United States in 2015 was approximately $1.8 trillion. The value of federal land in the contiguous United States would likely be lower if it were not sold to support military installations or national park operations. Stand At less than $1 trillion but that would mean $1 trillion the federal government wouldn’t have to acquire