Congress Drops the Ball: $34 Trillion in Debt and No Plan in Sight

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Six months have slipped by since the newly minted House Speaker, Mike Johnson, boldly declared it was high time to tackle America’s ballooning $34.6 trillion debt with a bipartisan commission.  He warned that ignoring the issue would lead to dire consequences, echoing concerns previously expressed by other Republican leaders. Fast forward to today, and that proposal seems to have tripped at the starting line, thanks to a robust chorus of naysayers from both sides of the aisle.

The failure to advance the debt commission bill highlights a persistent reluctance among lawmakers to face the unpopular sacrifices needed to curb the national debt, especially during an election year. The reality is stark: such a commission would likely recommend increased taxes or reduced government services, options unpalatable to many in Congress. As a result, legislators have typically deferred this contentious issue to future sessions.

The commission faces opposition from both sides for different reasons. Many Democrats, supported by left-leaning groups, worry it might suggest cuts to Social Security. Conversely, numerous Republicans and their allies fear it could lead to tax hikes, dubbing it a “tax trap.”

Expressing disappointment, Rep. Jodey Arrington, the Republican chairman of the House Budget Committee, noted the lack of progress despite strong initial support. External pressures and the commission’s framing as a means to surreptitiously increase taxes have dampened enthusiasm among his Republican colleagues.

In the Senate, the mood is similarly bleak. Senator Joe Manchin, the Democratic sponsor of the bill, lamented the general apathy towards the nation’s debt crisis, emphasizing the critical state of $34.6 trillion in debt being largely ignored.

The proposed commission, inspired by successful past initiatives like military base consolidations, would consist of 16 members—12 from Congress and four external experts—without voting rights. The commission would form a committee to recommend viable strategies that balance the budget and ensure the sustainability of key programs like Medicare and Social Security.

Fiscal projections are worrying, particularly for entitlement programs. The Social Security Trust Fund is expected to deplete by 2035, reducing its payout capacity to 79% of promised benefits. Similarly, the Medicare Trust Fund will only be able to cover full benefits until 2036 before requiring cuts.

Reflecting on the last significant attempt to reduce the deficit over a decade ago—which proposed a mix of tax increases and spending cuts—the reception was lukewarm, and Congress did not act on the recommendations.

The proposal under consideration has encountered significant opposition from influential groups such as AFL-CIO and AARP, who represent the interests of labor and retired individuals, respectively. Additionally, conservative organizations like Americans for Tax Reform and the Club for Growth have also expressed their opposition to the proposal. As a result, the proposal’s prospects have been significantly weakened, and whether the proponents can garner enough support to overcome this opposition remains to be seen.

These groups fear that the commission could impose new taxes or cut essential benefits, which is unacceptable to their constituents. Grover Norquist, from Americans for Tax Reform, opposes tax increases, arguing for reducing government spending. On the other hand, Democrats like Rep. Lloyd Doggett insist that any effective solution must include new revenue sources.

Despite the bleak outlook, some lawmakers remain hopeful. Rep. Scott Peters mentioned that passing significant legislation often takes time and perseverance, suggesting that the proposal might still advance, possibly during a lame-duck session.

So, as the proposal for a debt commission limps along, possibly pinned to a last-ditch lame-duck session maneuver, it’s clear that in the land of legislative gridlock, the more things change, the more they stay maddeningly the same.