Fiscal Commission To Focus On National Debt Taking Shape In US Congress – OpEd

Wed, 21 Feb 2024 01:28:27 +0000
World

The U.S. Congress hasn’t done much in the past month with one notable exception. The U.S. House of Representatives made progress toward establishing a commission to address the nation’s worsening fiscal situation.

As we all know, commissions are the politicians’ favorite way to deflect the ire of their supporters whenever they need to make hard choices that might cost them reelection. That a do little-to-nothing Congress is doing this now is a sign they know they’re running out of time to seriously tackle the government’s fiscal problems.

**Bipartisan support for a fiscal commission**

Roll Call’s Paul Krawzak reports there is bipartisan support to establish a fiscal commission:

The House Budget Committee advanced legislation that would create a bipartisan fiscal commission to come up with a solution to the government’s worsening budget outlook and propose it to Congress for expedited action.

Many Democrats oppose the plan, but three on the Budget Committee crossed over to join Republicans in approving the bill, 22-12. They included Scott Peters, D-Calif., who co-wrote the bill with sponsor Bill Huizenga, R-Mich.

“This is a way to get started,” Peters said of a commission. He argued that relying on “regular order” in Congress to set the government’s fiscal trajectory on the right path would fail.

Krawzak outlines the objectives of the fiscal commission as set out by the House bill:

The bill would create a 16-member fiscal commission evenly divided between House and Senate members and Republicans and Democrats, and including four nonvoting members from outside Congress.

The commission would be charged with writing a report and legislation to improve the long-term fiscal condition of the government, reduce deficits and debt, achieve a sustainable ratio of debt to gross domestic product by fiscal 2039, and improve the solvency of federal trust funds, including those that finance Social Security and Medicare.

**Bipartisan opposition**

This is Washington, D.C., so of course, there’s opposition from those who directly benefit from the current situation that has put the nation’s finances on an unsustainable path. Roll Call’s David Lerman finds that opposition is also bipartisan:

A proposed fiscal commission to fast-track deficit reduction measures, already under attack from the right, also faces a stepped-up assault from the left.

Rep. John B. Larson, D-Conn., led labor union leaders at a news conference Thursday to protest legislation that would create a bipartisan, bicameral commission that would devise a plan to curb red ink and require Congress to take an up-or-down vote on it with no amendments.

While anti-tax activists on the right warned the move would open the door to major tax increases, union leaders said the commission would lay the groundwork for cuts to Social Security and Medicare.

**So why move forward with a fiscal commission?**

Lerman argues that a fiscal commission is necessary to challenge the status quo upheld by its opponents.

Budget Chairman Jodey C. Arrington, R-Texas, said Wednesday that he viewed a commission as the most effective strategy for reining in the soaring cost of entitlement programs that is driving up deficits. “We need to focus on mandatory programs,” he said at a hearing he called to review the latest 10-year budget outlook of the Congressional Budget Office.

That CBO forecast said federal debt, as a share of the economy, remains on track to break the post-World War II record within five years and reach 116 percent of gross domestic product in a decade.

The Government Accountability Office, the investigative arm of Congress, reinforced that message Thursday when it issued its annual report on the nation’s fiscal health. “The unsustainable long-term fiscal path poses serious economic, security, and social challenges if not addressed,” the GAO warned.

Mandatory benefit programs such as Social Security and Medicare are key to deficit reduction, budget experts say, because those programs make up two-thirds of federal spending. And some say taxes may need to rise higher than their historical share of the U.S. economy in order to offset at least part of those benefit costs.

Since 2020, the cost of servicing the U.S. national debt has become the fastest-growing category of government spending. Its explosive growth is a direct consequence of two factors. The first factor is decades of failing to restrain the growth of government spending to sustainable levels, causing the national debt to swell. The second factor is the rise in interest rates to combat the inflation unleashed partly by the fiscal policies supported by the opposition to this new fiscal commission. The fiscal crisis has inevitably arrived from the combination of these factors.

The politicians in Washington, D.C. have been neglecting these issues for years. Instead of proactively addressing them, they wait until the situation becomes unmanageable and then form commissions to resolve the issues that were caused by their inaction. The question now is whether the politicians will come together, regardless of their party affiliations, and vote to establish a new commission to tackle the fiscal crisis that they have created.

This article was published at The Beacon