In a congressional hearing last week, several budget experts urged lawmakers to address the unsustainable growth in the federal debt through balanced deficit-reduction measures.
The experts told the House Financial Services Committee that rising medical costs and the needs of an aging population would put heavy pressure on the budget in coming years.
Douglas Holtz-Eakin, president of the American Action Forum, pointed out that policymakers have done little to change the spending trajectory of the health care and retirement programs that are key drivers of projected federal deficits.
Alice Rivlin, a senior fellow at Brookings, lamented the “polarized politics that prevents our coming to grips with serious long-run problems.” She urged elected officials to aim for a “grand bargain” that would reform entitlement programs, limit discretionary spending and raises revenue through tax reform.
Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, agreed that budget pressures require changes to spending programs as well as revenues.
Honeywell CEO David Cote warned that heavy federal debt burdens “could hike up interest rates and inflation rates, and it very well could slow our entire economy.”