1900 M Street NW • Suite 850 • Washington, DC 20036 • Phone: 202-596-3597 • Fax: 202-478-0681 The Campaign to Fix the Debt is a project of the Committee for a Responsible Federal Budget.

Congress Heard from Us The mounting national debt is getting harder for Congress to ignore and lawmakers are turning to us for advice. Committee for a Responsible Federal Budget (CRFB) co-chair Mitch Daniels, Campaign to Fix the Debt co-chair Judd Gregg, and Fix the Debt steering committee and CRFB board member Alice Rivlin testified before the Joint Economic Committee of Congress on the national debt on September 8.

Former Office of Budget and Management director Mitch Daniels said he has urged his fellow members of the Commission on Presidential Debates to devote one debate to the national debt and our country’s fiscal and economic future. He also appealed to lawmakers on behalf of younger and future Americans “for decisive action soon, at long last, that begins the gradual moderation of unkeepable promises and unpayable debt loads, which will otherwise be dumped on coming generations.” He called the annual borrowing that mostly funds current consumption over long-term investment “immoral” and contended that the “drift toward a Niagara of debt” is contributing to a growing lack of confidence in our government.

Why This MattersThe Era of Declining Deficits is Over – The latest official budget forecast says the deficit will rise this year to $590 billion and continue on an upward path. U.S. debt will also rise toward record level. The forecast also comes with a warning that high and rising debt will slow economic and wage growth.We Are Running Out of Budget Room to deal with the Next Crisis – Debt usually rises during recessions and other crises. Before the most recent recession, national debt was at 35 percent of the economy, near the average of the last 50 years. However, debt is now at 75 percent and rising. High debt could make it harder to deal with the next crisis.The Debt Affects All of Us – The nonpartisan Congressional Budget Office warns that high and rising debt will slow the economy and lead to lower wages compared to debt on a declining path. The average worker could expect $75,000 in lost income over a 30-year career. Interest rates will also be higher, making home, auto, and credit card loans more expensive. For example, a family with a $300,000 mortgage can expect to pay at least $60,000 more over the course of the mortgage. See how the national debt affects you.The Next President Won’t Be Able to Ignore the Issue – The worsening debt situation will weigh on the next president. However, neither major party candidate has put forth a plan to fix the debt. Instead, both White House contenders would add to the already unsustainable outlook. We need leadership from the candidates.

1899 L Street NW • Suite 225 • Washington, DC 20036 • Phone: 202-596-3597 • Fax: 202-478-0681 http://www.crfb.org/ http://www.fixthedebt.org/

Former Senate Budget Committee chair Judd Gregg (right) called for a new Simpson-Bowles commission with more authority. He praised new legislation from Senator Dan Coats (left) that would create a commission modeled after the Base Realignment and Closure (BRAC) commission, whose deficit reduction recommendations would receive an up-or-down vote in Congress. He also laid out ideas to improve the budget process, like restructuring the Budget Committee to include leaders from other relevant committees and to have equal representation from both parties. He also suggested that the budget have fiscal goals, such as specific targets for debt, deficits, spending and revenue as a percentage of the economy. He also recommended that large items like health care be broken out separately. And he proposed stronger enforcement mechanisms, like not allowing votes on spending bills until a budget is in place.

Former Congressional Budget Office director Alice Rivlin (left) urged simultaneous and bipartisan action to boost the economy and reduce the burden of the national debt. She said the rising debt is a threat to sustainable growth, but the problem is difficult for our political process to handle because the consequences of inaction are not immediate. She called for action to start now because a long lead time is required for changes to take effect. She also said that we can’t count on low interest rates forever because they will inevitably rise. And while economic growth is important, that alone won’t solve the debt problem. She laid out the core issues that must be addressed. “The drivers, as everybody knows, of future debt are the entitlements programs, especially the health care ones, combined with a rising number of older people and the failure of our inefficient tax system to produce enough revenues in a fair way to keep up with those added spending.”