Common Sense and the Federal Debt
A Modest, Practical Proposal for Reducing the Federal Debt
Welcome to the Civic Way journal, our quick take on the relevance of current events to America’s future governance. The author, Bob Melville, is the founder of Civic Way, a nonprofit dedicated to good government, and a management consultant with over 45 years of experience improving public agencies.
Having spent many years kicking the can down the road, America is now in a vicious cycle of deficits, debt, and dysfunction. – Concord Coalition
A Few Questions
As the second Trump administration embarks on its global disruption tour, there are many nagging questions about its commitment to confronting—let alone resolving—the federal debt crisis. Let’s start with some questions about DOGE, the Elon Musk-led advisory group.
Is DOGE for real? Is its mission driven by Trump’s executive order[i] or Musk’s ego? Will it try to eliminate debt or merely sabotage government? Will Musk’s inane antics and personal attacks continue[ii]? Will Ramaswamy’s departure neuter the anticipated regulatory review? Why did DOGE’s chief counsel leave[iii]? Will DOGE keep ignoring federal ethics rules[iv]?
Then there are the post-DOGE questions. What if DOGE fails to attain its goals by its July 2026 deadline? Is there a Plan B? Does Trump’s call for “common sense” apply to the debt issue? What happens if GOP leaders inflate the debt by extending the 2017 tax cuts? Will GOP and Democratic leaders launch a sincere bipartisan effort to eliminate the debt? Will that effort entail a hard look at entitlements, revenues and costs? Will we continue to kick the can down the road?
The Debt Imperative
Let’s acknowledge some hard truths. It is increasingly unlikely that DOGE will achieve its initial goal of cutting deficits by $2 trillion. This goal was wildly ambitious, especially given the plans to ignore entitlements and revenues, and extend the 2017 tax cuts.
A failure to manage expectations does not, however, doom DOGE to the obscurity pile of federal commissions past. There remains a useful role for DOGE to play, if it so chooses. But its leaders must decide that reducing the federal debt is more important than chasing headlines or indulging ideological impulses. Otherwise, the administration’s initial hopes for DOGE will be unrealized.
Another hard truth. The federal debt—like a monster in a Marvel movie—will soon be too big to stop. According to the CBO, the projected annual federal deficits will average 5.8 percent of GDP over the next 10 years[v]. By 2035, the publicly held federal debt will approach the highest level in US history. Interest costs, growing faster than defense and Medicare costs, will consume much of the federal budget. Our aging population and broken politics will only make it harder to rein in federal spending.
Unless we slash the federal debt now, the swelling debt will sap the federal government’s fiscal capacity to tackle it later. Worse, if we don’t lower the debt to an economically sustainable level now, the debt will become a serious drag on the world’s largest economy. Either way, if we fail to act now—with a bipartisan congressional consensus—we will face increasingly unpalatable fiscal choices down the road.
Guiding Principles
It is not too late to restore America’s financial stability, but no one person or group can do it alone. Not DOGE. Not the Trump administration. Not Congress. Not the Republicans. Not the Democrats. Each can play a vital role, but only in the context of a coordinated, multi-facet, multi-year bipartisan debt reduction campaign.
What will such a campaign need? A devotion to fairness and balance[vi]. Genuine curiosity—the polar opposite of ideological certainty—about how the federal government can work better for all Americans. An impartial, professional, data-driven analytical foundation. A willingness to challenge every entitlement, revenue source and program, and make tough choices among competing interests.
The debt reduction campaign also must produce something tangible. Not just an advisory blueprint, but a long-term plan with teeth. A statute with clear, enforceable performance metrics. A provision requiring the executive branch to make formula-driven revenue increases and cost cuts to offset any unanticipated budget deficits. A thoughtful implementation plan to prevent economic downturns.
The most important principle is humility. The federal government is far too massive and its operations far too ossified to tackle with one 18-month initiative. Fixing the federal debt crisis is long overdue, but it will require far more resources and time than Elon Musk and his merry band of efficiency experts and software engineers appear to have been allotted.
A Practical, Common Sense Approach
To have any chance of success, the new administration and Congress should organize the debt reduction campaign around more focused and manageable initiatives. At a minimum, the war on debt should encompass five fronts: 1) Urgent Care, 2) Wellness Care, 3) Fiscal Control, 4) Process Renewal and 5) Real Reform. These are summarized below.
Urgent Care – The President and Congress should establish a commission comprising leaders from the executive and legislative branches—and both parties—to propose a menu of short-term measures to stop the fiscal bleeding. This menu should include itemized entitlement, revenue and spending adjustments that enjoy bipartisan support (i.e., the proverbial “low-hanging fruit”). These emergency measures may be temporary, but they must put the federal government on the road to fiscal recovery.
Wellness Care – Congress should establish a bipartisan advisory panel to recommend long-term actions for eliminating deficits. This panel should represent a broad cross-section of think tanks, political leaders and federal constituencies. It should scrutinize every federal entitlement, revenue source and cost center. It should produce a ten-year plan for cutting the debt—balancing revenue increases with cost savings—and restoring the federal government’s fiscal health. The plan should include implementation strategies for minimizing socio-economic disruptions.
Budget Control – Congress should convene a panel of federal budgeting process experts to propose federal budget process reforms. The panel should suggest budget controls that will prevent structural deficits, link funds to performance outcomes and promote long-range budget targets. It also should explore ways to address related fiscal management issues like impoundment and debt ceilings. At a minimum, it should recommend a federal budget process with sufficient fiscal guardrails to protect future generations from the fiscal irresponsibility of this generation of politicians.
Process Renewal – The proliferation of federal agencies has produced an unwieldy—and inefficient—constellation of organizational silos. There has been little interest—let alone investment—in linking shared systems across these silos. Back office systems like accounting, lending, procurement, payables and payroll vary considerably across agencies. Programmatic processes like eligibility and regulatory also vary. Linking such processes across agencies—and modernizing technology—could generate impressive cost savings over time. DOGE could do this work.
Real Reform – There has been no shortage of bluster about “reforming” government. However, crafting transformational reforms—changes that restore public faith in federal government—will take more than 18 months. Instead, Congress should establish a bipartisan commission to revisit federalism, redefine the federal government’s role, and examine all operations. Finally, this group should offer ideas for defunding duplicate programs, merging agencies, streamlining operations and improving services.
There are many ways to organize the debt reduction work. Regardless of how the campaign is structured, every work product should include an actionable plan subject to congressional approval. The five initiatives outlined above will be described more fully in coming essays.
Closing Thoughts
GOP leaders too often echo the behavior of self-righteous hypocrites, denouncing “big spenders” while guzzling more debt. In turn, many Democratic leaders act like dazed stoners blissfully unaware of the looming perils of federal debt. Neither party takes responsibility for the mounting federal debt nor offers consensus-ready solutions. Both seem more interested in delay than compromise.
If our inertia continues, Medicare and Social Security will be insolvent in less than a decade. By 2050, interest costs will exceed all federal appropriations, including defense spending. The federal debt towers over many hot campaign issues—inflation, immigration, even the holy political trinity of diversity, equity and inclusion—yet we allow our elected officials to ignore it.
The Concord Coalition’s Executive Director just told the new president and Congress, “Do your job.” That should be our expectation of every elected official. Let’s make 2025 the year we start holding political leaders accountable for failing to fix problems like the federal debt crisis.
Thanks for another thoughtful, targeted, articulate, sensible post.
If only ...
Several things:
1. One more critical element is a robust plan for messaging to the American people why this is necessary and how the various pieces have been selected. (Bill Clinton did a superb job explaining to the people why we needed tax increases when he brought the economy into balance, something that--despite their malarkey--Republicans have had less success at than Democrats.)
2. There needs to be a whole lot of thoughts about how various moves might interact with each other. And how they play out over time. To keep with the medical framework, eliminating insurance supports may be a short run gain but when more and sicker people show up in the ERs, these savings evaporate. This is particularly true with regard to environmental issues. Short run savings/actions might have truly long run catastrophic results.
3. I can't stress how much I agree with the importance of humility. We desperately need that. But we need to be careful to not extend the need for humility to assuming vast swath of science is irrelevant. Yes, science always need to be questioned BUT at some point willful ignorance is stupidity not humility.
4. All this discussion seems pointless as long as Trump and Musk are insisting there will no increases--maybe decreases--in the taxes of the richest. Democrats would be politically (and probably morally) idiotic to go along with that. So, for now, deficit discussion is DOA. Republicans in Congress have shown no ability to stand up for what they know to be true. In what universe does this suggest spending time worrying about the deficit is worthwhile? I think before we can have this discussion there must be a clear sign that there is going to be pushback to the Trump agenda. Simply figuring out how to fight that agenda might be more productive.