U.S. Representative Jared Golden, a pro-choice, pro-gun Democrat from a pro-Trump district in the backwoods of Maine, has proposed what a Washington Post columnist (Steven Pearlstein) calls “a reasonable plan to tame runaway budget deficits.”[1]
Golden’s letter to his constituents “starts by acknowledging the obvious political reality that in a deeply divided country with an evenly divided Congress, bipartisan compromise is inevitable. And this letter acknowledges the economic reality that running big deficits not only stokes inflation but risks triggering a debt spiral in which interest payments eventually consume the entire federal budget. The immediate challenge, he writes, is to stabilize deficits so the nation’s debt grows no faster than the nation’s income.”
To meet this challenge, “Golden sets a target of reducing borrowing by $250 billion a year in each of the next two years:”
- “Half would come through spending caps such as those floated by Republicans: capping inflation-adjusted “discretionary” spending (everything other than Social Security and Medicare) at last year’s levels, along with rescinding student debt cancellation and recapturing unspent covid funding.”
- “The other half would come from raising additional revenue in ways long favored by Democrats: raising the tax rate on big corporations to 25 percent, imposing a surtax on corporate stock buybacks, and rescinding the Trump tax cut for individuals making more than $400,000 a year.”
Reaction
Although this blogger has not studied the many details of the current debt ceiling crisis, I endorse Representative Golden’s proposal as a good place to start.
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[1] Perlstein, Amid the debt ceiling madness, a lonely voice of sanity emerges, Wash. Post (April 24, 2023); Jared Golden, A letter from Congressman Golden (April 14, 2023).
