With the debt ceiling resolved, it’s time for a fiscal responsibility commission

The House and the Senate passed the Fiscal Responsibility Act (FRA) with large bipartisan margins. The act was based on negotiations between President Joe Biden and House Speaker Kevin McCarthy (R-Calif.) and suspends the debt ceiling until Jan. 1, 2025, in exchange for certain spending cuts, restraints and other provisions. 

The act was a compromise that was unacceptable to far-right and far-left members in both houses of Congress. Reasonable people can and will differ on the bill, but it was clearly in the nation’s interest to avoid default. In addition, those who voted against the bill did not have a proposed way forward that was politically feasible. Stated differently, they let the perfect be the enemy of the good. 

While the bill was named the FRA, it only makes a modest dent in the large and growing projected fiscal imbalance and would not stabilize, much less reduce, projected debt/GDP levels. Therefore, while it is more responsible than the prior status quo, it does not come close to assuring fiscal sustainability — which is essential for our future economic security, national security and domestic tranquility. 

Now that default has been averted, we must focus on what is needed to restore long-term fiscal sustainability. We should start by acknowledging several things. First, the debt ceiling has failed to constrain the growth in the size and scope of the federal government and escalating debt levels. Second, other past statutory approaches that were intended to constrain federal spending and mounting debt levels have not stood the test of time. Finally, very tough choices encompassing budget controls, mandatory spending, discretionary spending (including defense) and increased taxes will be needed to restore fiscal sanity. Everything will need to be on the table, but all things are not equal.

Given the above, two actions are needed. First, we need a statutory “Fiscal Sustainability Commission” that reflects the lessons of the past Simpson-Bowles Commission. Specifically, such a commission needs to be established by law to ensure buy-in from the president, House and Senate, and to achieve a guaranteed vote on the commission’s recommendations.

The commission should be charged with making recommendations that will stabilize debt/GDP at a specified level (e.g., 90 percent) by a specified future year (e.g., 2035). It needs to be comprised of up to nine capable, credible and nonconflicted individuals who span the political spectrum. This means no current elected federal officials and no representatives of major interest groups. The criteria for achieving an automatic vote on the commission’s recommendations should be no more than two-thirds of its members. Most importantly, the commission should have up to a year to engage in a broad range of citizen education, engagement and outreach activities designed to solicit input on possible reforms. After doing so, the commission should make a package of recommendations that will be guaranteed an up or down vote in Congress after the next election.

I have engaged in such activities in 47 states since 2007, including a 27-state, 10,000-mile national fiscal responsibility bus tour in 2012. I found that Americans are way ahead of their elected officials. Once they are educated on the facts and truth regarding our nation’s deteriorating financial condition and the adverse implications for our country, children and grandchildren, they are willing to accept the tough choices needed to stabilize debt/GDP at reasonable and sustainable levels. For example, Alice Rivlin, Belle Sawhill and I confirmed this in direct engagements with large and demographically representative groups of voters in 2012. Unfortunately, we are in much worse shape today than in 2012, which should increase the urgency for timely action. 

As noted above, past statutory approaches have failed to ensure fiscal sustainability, in part because the current Congress cannot bind future Congresses. Therefore, the only action that can stand the test of time is a Fiscal Responsibility Constitutional Amendment designed to reduce and stabilize debt/GDP at reasonable and sustainable levels. Other countries like Switzerland, Sweden and Germany have successfully adopted this approach. HCR 24, sponsored by House Budget Committee Chair Jodey Arrington (R-Tex.), is intended to accelerate action on proposing such an Amendment either by the Congress directly or via a convention of states designed solely to propose a Fiscal Responsibility Amendment. 

It is time to recognize reality. America is a great nation, but it is in decline. We can and must reverse this trend. Economic strength is the leading indicator in the rise and fall of great powers. Economic strength will not be maintained if we do not put our federal finances in order. We will have to do so at some point — and hopefully not in a crisis-management fashion due to a loss of confidence in U.S. fiscal and monetary policy. Such a loss of confidence would be accompanied by a global depression. This can be avoided by pursuing the above steps. The time for action is now.

David Walker served as U.S. comptroller general and is a founding board member of the Federal Fiscal Sustainability Foundation.