According to Treasury Secretary Janet Yellen, the United States government will default on its national debt by June 1 if Congress does not act to raise the country’s $31 trillion national debt limit. Late last month, the House of Representatives passed a bill that would raise the debt limit while capping spending for the next 10 years. Missouri Sen. Josh Hawley and Kansas Sen. Roger Marshall both praised the legislation, noting that it shields spending on popular programs such as Medicare and Social Security, while cutting elsewhere. By contrast, Senate Majority Leader Chuck Schumer called the bill “dead on arrival.” President Joe Biden is now calling for an emergency meeting with House and Senate party leadership to resolve the impasse and avoid what Yellen warned would be a financial and economic “catastrophe.”
Such partisan rankling raises fundamental questions: First, if the deficit and national debt are existential problems, why are politicians arguing rather than enacting solutions? Are current proposals a workable fix — and if not, what would potential solutions look like?
The answer to the first question is simpler. Research by our team at Policy vs. Politics, a nonpartisan organization providing Americans access to information and data about public policy without political spin, shows that bringing the federal budget into balance within 10 years requires painful spending cuts and tax increases — something few politicians want to vote for. That pain would become impossibly large if tax increases are taken off the table and big-ticket programs are excluded from cuts.
The thing to understand is that there are no easy fixes to America’s deficit problem. The federal budget cannot be balanced simply by cutting foreign aid (including assistance to Ukraine) or eliminating programs that few Americans want. The entire foreign aid budget is less than 1% percent of total federal spending. And virtually all federal programs are supported by large constituencies — that is likely how they were created in the first place.
CURRENT PROPOSALS to deal with the deficit and national debt, such as the one praised by Hawley and Marshall, would cut federal spending by trillions of dollars. Even then, the federal budget would still be in deficit and the national debt would steadily increase. Additionally, by excluding defense spending, Social Security and Medicare from reductions, spending cuts would fall disproportionately on remaining programs — everything else the federal government does, from public works to student aid.
Our research shows if the House plan were implemented, most of these programs would ultimately see cuts of 50% or more, significantly limiting their ability to deliver anything close to their existing services. It is no surprise that current proposals are vague in specifying which programs would face the ax. Congressional support would likely vanish if members had to defend cuts of this magnitude one program at a time to the public.
To balance the budget without gutting federal agencies, everything needs to be on the table. Congress will likely need to consider reversing the tax cuts enacted in 2017. Modest increases in the Social Security retirement age would save enormous amounts, as would changes in Medicare, such as expanding the federal government’s ability to negotiate the price of prescription drugs and other services. Military spending should be scrutinized to ensure that new, expensive programs provide meaningful security benefits. The rest of the budget should undergo similar treatment.
None of these changes would be easy or painless. However, the dangers from doing nothing about budget deficits and the national debt are increasing. Today, members of Congress face their last, best chance to address these issues. Meaningful change is possible, but only if members put politics to one side, negotiate in good faith, and make politically tough decisions for the good of the nation.
About the authors: Nathaniel Birkhead is a political science faculty member at Kansas State University. He co-authored this with William Bianco of Indiana University and Nicholas Clark of Susquehanna University. They also direct the research group at the 501(c)(3) nonprofit Policy vs. Politics at policyvspolitics.org
