Americans understand that our nation’s strength and security depend on its fiscal health. But we face an ongoing, long-term mismatch between our spending and revenues – and year after year, administration after administration, the debt grows larger.
A lot of ordinary people worry about this. They believe that a healthy fiscal situation is essential to our success as a nation. And they want policies in place that allow us to address the debt without interfering with the economic well-being of the country.
The presidential candidates aren’t giving serious attention to deficit reduction, and neither, for the most part, are members of Congress. Yet with a rising proportion of older people and spending on entitlement programs such as Social Security, Medicaid and Medicare growing dramatically, we’re not far away from facing dangerous levels of debt. A fix is becoming increasingly urgent, and the longer we delay the more difficult it will be.
So what do we do? The solutions flow along three broad lines: spending cuts, tax increases, and economic growth. There are advocates for each, but it is hard to imagine that salvation lies in one approach alone. We need them all: a combination of tax increases, spending cuts in both defense and non-defense areas, and economic growth that will stabilize debt at a manageable level.
Each is difficult. Capitol Hill’s preferred tactic when it comes to taxes is to cut them, not increase them. On the spending side, the rhetoric coming from Washington – and out on the campaign trail – raises unrealistic expectations about the savings that can be achieved through budget cuts. Most proposals fall far short of what is needed, and the demands we face on entitlement programs, the country’s evident need for public investment – especially for infrastructure – and higher interest rates on the debt are all powerful forces pushing in the opposite direction.
Still, the three-pronged solution I’ve outlined is privately acknowledged by almost everyone I’ve encountered, whatever their public position, to be the only realistic approach. The longer we delay, the more painful the adjustment will be.
Our system has met greater challenges in the past. We’ve been through a civil war, two world wars, waves of immigration unseen by any other nation, and we’ve managed them all. It took strong political leadership, bipartisanship, negotiation, and compromise to thread our way through. That’s what getting our debt under control will require. We’d better get started.
Lee Hamilton is director of the Center on Congress at Indiana University. He represented Indiana’s 9th Congressional District as a Democratic member of the U.S. House of Representatives for 34 years.