By Chuck Slocum – Guest Columnist
With the Republican controlled U.S. House and Senate back at work and Donald Trump still in his first year as president, time is right for serious agenda shaping.
There is one notion that has had too little discussion that should become top drawer for policymakers and the public — it may take a magic wand to successfully address it.
While the nation’s balance sheet has hovered around it for a long time, the national debt just cracked the $20T threshold…that’s 20 followed by 12 zeros…000,000,000,000…or just about $160,000 for each U.S. taxpayer if we were to pay it off today.
The goal, of course, is putting together a long-term debt plan that is sustainable and one that will improve the well-being of all Americans, according to “Fix-the-Debt” Co-Chairs, Republican Judd Gregg (former U.S. Senator and Governor from New Hampshire) and Democrat Ed Rendell (former governor of Pennsylvania and mayor of Philadelphia.)
The national debt, at 77 percent of GDP, is already higher than it has been since the end of World War II. The non-partisan Congressional Budget Office forecasts that the current debt, if left unattended, will climb to 91 percent over the next decade.
This year, Congress and President Trump have punted forward from April to December the deadline for agreement on passing a budget for the U.S. government. Congress now has less than three months to create a blueprint for fixing the debt so that it is declining as a share of the economy in the years to come.
Federal lawmakers this year must be told to refrain from digging into the magic tricks of budgeting, including the deceptive use of a projected 3 percent growth rate which is highly unlikely given the aging population and other demographics.
Congress should adhere to their own “pay as you go” rules regarding funding for existing and new programs thus refraining from adding to the current deficit. In the last budget go around, Congress agreed to add $1T more to the debt by circumventing their very own rules.
It has been over 30 years since the current federal tax code has had an overhaul. Fundamental tax reform is necessary. Unfortunately, history has shown that tax cuts generally do not pay for themselves entirely through economic growth. But, a wisely crafted and comprehensive tax reform plan can clearly help to fix the debt. At the very least, tax reform must not add to the debt.
Another thing to keep in mind as the president and Congress move ahead with their new budget deal — which will include only about one third of the total federal spending — and that is that the most prominent auto pilot spending not included is fourfold: 1) Social Security, 2) Medicare, 3) Medicaid, and 4) interest payments on the current debt. These are the real drivers going forward to address the debt.
A fix is possible if there is a bipartisan will to do so while preserving the necessary social safely net for those who most need it.
Now is the time to contact your own Congressman and U.S. Senators concerning their views about beginning to fix the still growing $20T federal debt and ask for answers to the question of what it will mean to all of us if it is left unattended.
Chuck Slocum of Minnetonka, president of The Williston Group, a management consulting firm, has been a volunteer with Fix the Debt. Further debt policy information is available by visiting the website http://www.fixthedebt.org/who-we-are or addressing questions to [email protected]