As the national debt continues to balloon, surpassing $34 trillion and counting, Washington remains deeply divided on how to tackle the issue. Last year, Congress suspended the debt ceiling, which limits the Treasury’s borrowing, but only after months of intense partisan fighting over spending.
The agreement included a plan to cap annual government spending, which is expected to reduce deficits by over $1 trillion in the next decade. Despite this, the national debt is projected to reach a staggering $54 trillion in the next 10 years, according to projections.
U.S. Debt Crisis (Credits: Zee Business)
Lawmakers have proposed various solutions to lower the national debt, including cuts to annual funding, changes to entitlements, and raising taxes. House conservatives have pushed for deeper cuts to government funding bills, beyond the agreed-upon budget caps, drawing staunch opposition from Democrats.
The partisan bickering and delays in passing funding bills have raised questions about the funding levels Republicans will seek when the GOP-led House begins crafting its government funding bills for fiscal 2025.
Some Republicans have emphasized the need for reforms to programs like Social Security and Medicare, which are not subject to yearly spending fights.
Bipartisan reforms could help shore up solvency for these programs, which face funding threats in the coming years. However, changes to these entitlement programs are often regarded as a third rail in Washington, making them a heavy lift in Congress.
President Biden‘s budget proposal included tax increases targeting the wealthy to reduce deficits and fund social programs. The plan includes increasing the corporate tax rate, enacting a minimum tax on billionaires, and quadrupling the stock buybacks tax.
US Debt (Credits: The National Interest)
Additionally, Biden proposed shoring up solvency for Medicare’s hospital insurance trust fund by raising tax rates on Americans earning more than $400,000, raising the capital gains tax, and eliminating tax subsidies for real estate and cryptocurrency transactions.
While these measures enjoy support from Democrats, much of the tax proposals are considered a non-starter with Republicans, who argue Congress should focus on cuts instead.
The national debt’s growth poses concerns, and finding solutions will require bipartisan cooperation and compromise. The proposed ideas aim to address the issue, but their implementation faces political hurdles. Lawmakers must change these challenges to find a path forward and ensure a stable fiscal future for the nation.
