12/08/2023

Swelling Debt Leads to Calls for Fiscal Commission

The nation's debt has ballooned since the TCJA went into effect

Support is growing in Congress for a bipartisan fiscal commission to identify necessary tax and spending changes to help improve the nation’s fiscal outlook. The U.S. debt has been expanding at a record rate since the 2017 implementation of the Tax Cuts & Jobs Act (TCJA), passed under the last administration.

The calls intensified after Moody’s last month changed its outlook for U.S. sovereign debt from stable to negative and warned that "continued political polarization" in Congress threatens the country’s fiscal outlook. Moody’s has kept the nation’s credit score intact for now, but the other two big credit rating agencies, Fitch and Standard & Poor, have already downgraded the United States’ long-term credit rating.

With interest rates at a 16-year high and the national debt approaching record levels as a share of the economy, many lawmakers on both sides of the aisle said a fiscal commission represents the best chance to put the country on a more sustainable fiscal path.

A bipartisan group of House lawmakers – led by Reps. Bill Huizenga (R-MI) and Scott Peters (D-CA) – introduced the Fiscal Commission Act of 2023 in September, which would establish a 16-member fiscal commission, including 12 members of Congress and four outside experts appointed by House and Senate leadership, tasked with making specific revenue and spending recommendations that would receive fast-track consideration in Congress.

"The only way to get our nation’s fiscal house in order is for Congress to face reality and address the unsustainable trajectory of our national debt," Huizenga said. "For too long, Congress has kicked the can down the road and not made the decisions necessary to secure our nation’s fiscal future for the next generation of Americans."

"In the next 10 years, we will spend more on interest to our debt than on defense or Medicaid," Peters said. "This commission allows us to finally address the unsustainable debt that endangers our children’s future."

This article was provided to OSAP by ASAE's Power of Associations and Inroads.