In my last post I praised House Speaker McCarthy and the Freedom Caucus for insisting on spending cuts before agreeing to raise our current debt limit of $31.4 trillion. But how to accomplish this in a responsible way that keeps public opinion on your side?
Here is one possible approach:
- Continue to emphasize your intention of returning to “regular order” whereby spending bills for each federal agency are developed by standing committees in a bipartisan manner with an overall spending limit established by the budget committee. Since this will take several months to accomplish, either offer to raise the debt limit by $1 trillion or so in the meantime (enough to get through the current fiscal year which ends on September 30, 2023) or perhaps suspend the debt ceiling until then. Returning to regular order is a clearly sensible reform which has the potential to eliminate much wasted and unnecessary spending.
- The Covid health emergency should be legislatively ended as soon as possible and all unspent funds from the $6 trillion of pandemic stimulus be declared void. This would save $255 billion in 2023-24 alone.
- Although entitlements such as Social Security, Medicare and Medicaid make up 2/3 of long-term debt projections, the House has decided not to propose entitlement reforms during the current negotiations. This is a smart strategy. There are many good ideas, in particular, for the difficult job of reforming healthcare, and lowering its cost, but these will take longer and broader discussion to implement.
Conclusion. The House is off to a good start in insisting on spending cuts in return for raising the debt limit. The general public understands that we have a very serious debt problem. By continuing to act in a responsible manner, and keeping public opinion on its side, the House is in a good position to win this important political battle.
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