America is facing fiscal catastrophe. The recent massive increase in federal government spending has placed the U.S. government on an unsustainable path. The problem is so severe that in the near term the U.S. government will exhaust its capacity to service its debt – regardless of the statutory authority to borrow. Failing to address this problem today could bankrupt the nation.
There is a path forward that fundamentally fixes the systemic problems. It is a Balanced Budget Amendment (BBA) that caps federal spending at 18% of Gross Domestic Product (GDP).1 While important reforms in addition to the BBA must be enacted, absent this strong BBA all other proposals will falter.
The Senate Republican BBA includes the essential components that will ensure we tackle our debt crisis; air tight enforceability, a prohibition on spending more than we take in, and the right-sized cap on federal spending.
A Bulletproof Cap
The most effective way to cap federal spending is through an amendment to the Constitution. The Senate Republican BBA does just that by placing in the Constitution a prohibition on spending more than we take in and a bulletproof cap on spending at 18% of GDP.
In the past, Congress enacted budget deficit caps with great fanfare. While sometimes they worked to limit spending growth for a year or two, Congress returned to its free spending ways and abandoned the deficit caps once the spotlight dimmed....