Cut Deficit in Half and Debt Will ‘Stabilize’ in 10 Years: CBO Chief

Phillip Swagel, Director of the Congressional Budget Office, (CBO), says that reducing the deficit spending to 50 percent (as a percentage the nation’s Gross Domestic Product (GDP) would prevent the increase in the national debt within ten years.

GDP stands for the aggregate market value all products and services that are produced in a country. The difference in what the government spends and what it receives from taxes is called the deficit.

Currently, the annual deficit in spending is 3 percent of the GDP. This does not include interest payments for the national debt.

It would be possible to reduce the deficit from 1.5 percent of GDP, its historic level. “stabilize” Swagel stated that 10 years would be the end of the country’s debt. This was a statement Swagel made on March 6, meaning that debt as a percent of GDP will cease to grow.

Swagel indicated that such a reduction would need to be cumulative at $5 trillion per decade.

File images of President Joe Biden (L) and House Minority Leader Kevin McCarthy, (R-Calif.). (Getty Images)

Swagel explained that the Federal Debt will rise from 98% of GDP to 118% if spending continues as it has in the past.

CBO offered a list These are just 17 of the possible spending cuts that would be necessary to reduce government spending. There are many options, from a cap on federal Medicaid spending to establishing flat Social Security benefits amounts to taxing global warming gas emissions.

According to CBO, 17 spending reductions would result in savings of between $9.1 and $17.6 trillion for 10 years. But, any combination of $500 billion annual cuts would have a stabilizing impact.

Swagel stated that he does not recommend a reduction in deficit spending. This is a decision made by Congress. CBO’s report shows the potential impact of such a move on the national deficit.

House Speaker Kevin McCarthy (R.-Calif.), President Joe Biden and others are currently in negotiations to raise the debt ceiling.

Biden stated that he expected Congress to approve the bill. “clean” Increase the debt ceiling to preserve the United States’ full faith, credit and ability

McCarthy claims that there won’t be a default on U.S. government debt. But he insists on an enforceable guarantee. “responsible” Increase in the debt limit is accompanied with spending concessions

Senator Joe Manchin (D.W.Va.), broke with Democratic party lines and called for future spending reductions along with an increase of the country’s debt limit in a March 3rd. speech.

The limit at $31.4 trillion currently stands. This would be reached on January 19, if the U.S. Treasury hadn’t taken. “extraordinary measures” to delay it. The CBO predicts that these measures will expire sometime in July or September.

A spokesperson from the White House stated that there is no future meeting between McCarthy and Biden.

Expect the President to unveil his budget proposal for 2024 on March 9th.

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