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The United States is in dangerous, uncharted waters when it comes to the national debt.
This year, for the first time in U.S. history, the national debt surpassed $20 trillion – and it continues to increase at an alarming rate. We find ourselves here because our country has been on an unsustainable fiscal path for far too long.
At 77 percent of GDP, the national debt is at its largest share of the economy since the aftermath of World War II. On the current path, without serious bipartisan collaboration, our debt will grow to 91 percent of GDP in just 10 years, and then to 150 percent of GDP by 2047.
That will produce a significant drag on the U.S. economy, and Americans will feel the consequences in real ways. If our nation’s debt continues to increase at the same rate, it will slow economic growth to the point where the economy will be 3 percent smaller in 2047 than it would have been otherwise. That also means Americans will see lower incomes and higher interest rates on items like credit cards, mortgages, car loans and student loans. There will also be lower private investment and, in turn, fewer jobs.
For eight years, we heard Republicans sound the alarm on our nation’s fiscal state. Now that they are in power, it seems as though the alarms have been silenced when it comes to fiscal discipline.
In fact, the “Big Six” tax framework – a Republican approach to tax reform endorsed by the Freedom Caucus – would likely worsen our nation’s fiscal problems. Since the release of the “Big Six” framework, the Committee for a Responsible Federal Budget has estimated that the framework in its current form could cost up to $2.2 trillion over the next decade. The Tax Policy Center estimated it would cost $2.4 trillion over the same amount of time.
Economic growth will help cover the cost of tax cuts, congressional Republicans and the Trump administration say. But what they don’t say is that the Congressional Budget Office, the Joint Committee on Taxation and many well-respected economists have all estimated that negative to little economic growth will come from unpaid-for tax cuts in this economic environment.
The American people can’t afford to be cheated by unrealistic, rosy economic growth predictions. For their sake, we need to ensure the JCT and the CBO measure the tax bill so we can produce an honest and credibly revenue-neutral tax reform package.
We must look to our history to see how this has been done before. In 1986 – the last time Congress passed a tax reform package – Republicans and Democrats used a bipartisan process to enact revenue-neutral tax reform. If done right, today’s tax reform package could create an opportunity for both parties to come together and turn our country in the right fiscal direction.
That’s why the Blue Dog Coalition announced its Vision for Tax Reform last week, in hopes that congressional Republicans will give the Blue Dogs and other Democrats a real seat at the negotiating table. History proves that, together, we can produce a tax reform bill that is credible, revenue neutral and puts us on the path to fiscal sustainability.
The American people are counting on congressional leaders to uphold the promise of addressing our national debt – now is the time to do that in a balanced, bipartisan way. Our children, grandchildren and other generations to come are depending on us. As Blue Dogs, we stand ready to make that happen.
Reps. Jim Costa (D-Calif.), Henry Cuellar (D-Texas) and Daniel Lipinski (D-Ill.) are co-chairs of the Blue Dog Coalition, an official caucus in the U.S. House of Representatives.
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