Later this month Congress will be debating the debt ceiling (again). As both sides of the aisle try to prevent a government shutdown, the debt clock keeps ticking away with the per person average hovering around $95,000. Many Americans don’t earn that much in a year.
The Committee for a Responsible Federal Budget published a report titled “The Better Budget Process Initiative: Improving the Debt Limit” in 2015.
Ten debt limit reform options are outlined in the report.
Option Number 10 suggests replacing the debt limit with a “debt cap”:
“Instead of basing the debt limit on future obligations, policymakers could simply enforce it with reductions in future debt (currently it is enforced by prohibiting any future borrowing). One approach to do this would be to replace the statutory debt limit with a “debt cap” that requires Congress and the President to enact policies to ensure the debt-to-GDP ratio is within specified targets, enforced by automatic spending cuts and revenue increases if Congress and the President fail to act.
The debt cap could apply to the upcoming fiscal year, or to a rolling five-year period. The latter approach would allow Congress and the President to enact policies that gradually reduce debt below the cap by the end of the five-year period. As similar policy exists in Switzerland where a statutory debt brake limits spending growth to the average revenue increases over a multiyear period. This ensures on average spending won’t grow faster than revenue.”
It’s time to speak up as a voter. Let your congressional leaders know that a viable solution exists to begin the journey back to fiscal sustainability and that as your representative, you want them to Vote for HCR 24