I am grateful to Dr. William Beach, a Coolidge Foundation Coffin Family Fellow and former Bureau of Labor Statistics Commissioner, for inviting me to present on my fiscal BRAC proposal at America in Debt, a national conference held at the Library of Congress on March 7, 2024. My remarks are below.
A BRAC‐Like Fiscal Commission Can Solve our Debt Challenge
Our national debt is on track to surpass unprecedented heights, soaring to 166 percent of GDP by 2054, according to the Congressional Budget Office’s optimistic projections of debt held by the public. US debt could grow to possibly insurmountable levels should legislators fail to course‐correct in time. The unchecked growth of federal health care and old‐age entitlement programs poses by far the biggest fiscal challenge.
According to figures reported in the Financial Report of the United States Government, Medicare and Social Security are jointly responsible for 100 percent of the federal government’s long‐term unfunded obligations. Left on autopilot, the projected growth in these old‐age benefit programs threatens to burden younger generations with insurmountable debt, economy‐crushing tax hikes, and the black‐swan threat of an unprecedented US fiscal crisis.
We cannot afford to ignore this reality any longer. It’s past time for a new approach.
Over the past 15 years, we have witnessed several attempts at tackling the entitlement‐driven spending challenge. We have witnessed congressional leadership proposing solutions, and we’ve seen several fiscal commissions come and go, without making meaningful progress on this critical issue. More on that history in a bit.
There is, however, one approach that Congress has not yet tried. And that is modeling a fiscal commission after the successful Base Realignment and Closure Commission, or BRAC.
BRAC was a process to identify obsolete military bases, following the end of the Cold War. It established an independent commission to help Congress overcome the apparently intractable political challenge of making decisions that involve concentrated costs and dispersed benefits. It was clear to all that keeping costly military bases that were no longer needed was contrary to the national interest. And yet, legislators would fight tooth and nail to keep bases open in their jurisdictions. So, they set up BRAC. It succeeded and saved federal taxpayers billions of dollars.
Applying the BRAC concept to resolving America’s fiscal challenge is an innovative approach that holds immense promise in surmounting the political hurdles that have plagued past entitlement reform efforts.
What makes this commission different from those that Congress already tried?
Let me break it down:
First, a BRAC‐like fiscal commission should consist of independent experts—individuals unencumbered by partisan affiliations. Congress could then point fingers at these experts for making recommendations that are economically necessary but politically unpopular.
Second, the commission’s mission would be to stabilize the debt. How? By ensuring that spending and revenue policies keep debt from exceeding our Gross Domestic Product (GDP). Importantly, the details would be left up to the commission.
Third, empower the commission with Fast‐Track authority. Instead of expediting the commissions’ plan through Congress and putting politicians on the record with affirmative votes, the BRAC plan would be self‐executing, unless Congress leveraged expedited procedures to vote it down.
And that is the crucial twist—the linchpin of my BRAC proposal:
Commission recommendations would be self‐executing. You heard it right. Unless Congress explicitly objects, the commission’s proposals would take effect automatically. This is essential.
Legislators obviously shy away from making decisions that create clear winners and losers due to re‐election concerns. But with a self‐executing mechanism, they can advocate passionately for their constituents while simultaneously allowing necessary policy solutions to take effect.
A BRAC‐like commission paradoxically empowers legislators to be both advocates for their constituents and stewards of the whole nation. They become champions for their communities, blaming politically unpopular outcomes on commission experts.
As such, a BRAC‐like fiscal commission transcends politics, elevates Congress, and provides a workable path to secure fiscal stability, securing the foundation of a strong and prosperous America.
Why might this commission work where others have failed? Because designing a commission after the successful Base Realignment and Closure commission corrects for shortcomings of previous efforts. The below summarizes the past 14 years of attempts at correcting the US fiscal course and their breakdown.
In 2010, President Obama established the Simpson‐Bowles commission. Congress and the president felt pressure then to address the debt as stimulus spending had failed at reigniting the American economy but had succeeded in driving up the national debt. Yet the president failed to put executive support behind the commission’s recommendations. Even if the president had been more supportive, it is not clear that the plan could have survived an affirmative vote in the Congress.
In 2011, Paul Ryan served as the chair of the House Budget Committee. He dared to propose bold solutions, including Medicare premium support, to address the biggest debt driver head‐on. He was a visionary leader, and he was vehemently attacked for it.
The 2011 Budget Control Act, led by then‐Speaker of the House John Boehner, by arguably backing President Obama into a corner over the debt limit, set up a special bipartisan super‐committee of legislators and even established automatic cuts to force a solution; yet this effort failed, too.
Leadership on reforming entitlements cannot be confined to one party or one chamber. Not even in the face of automatic spending cuts. That’s one lesson we learned the hard way during that post‐Great Recession era.
Fast forward to 2020 when Senator Joe Manchin showed remarkable leadership by advocating for a bipartisan, bicameral fiscal commission—established by the TRUST Act—to address Medicare’s and Social Security’s solvency. It garnered significant bipartisan support.
Yet making that commission explicitly about reforming entitlements and relying solely on members of Congress to serve on the commission was unlikely to work.
More recently, together with Senator Mitt Romney, Manchin has championed the Fiscal Stability Act, which is the companion bill to the House‐championed Fiscal Commission Act. This would establish a bipartisan fiscal commission, guided by experts, to stabilize the debt at no more than 100 percent of the economy over the next fifteen years.
Importantly, it’s about more than reforming entitlements. It’s focused on addressing the broader debt challenge, and this vagueness is a key strength of the approach because it makes it less prone to political attack.
The Fiscal Stability Act is a promising step toward Congress taking another crack at fixing our debt challenge before it’s too late. At the very least, it will reignite a public conversation about the key drivers of America’s fiscal challenge and the programs that are at the core of the issue.
But it’s no BRAC.
A fiscal commission can be most effective in providing Congress with the necessary political cover to reform entitlements, if legislators are removed from commission proceedings and don’t have to take a public vote to enact the commission’s recommendations.
I am now quoting Representative Jon Kyl (R‑AZ) from BRAC discussions in the House of Representatives during the 100th Congress:
“I do not think we are fooling anyone when we say we are all for closing obsolete bases, but then we attach so many preconditions to it that we know we are never going to end up closing the bases. One of these is the difference between automatic closure and the provision that would require Congress to affirmatively act. Who among us believes that we will actually close bases if we have to affirmatively act?”
Representative Jon Kyl hit the nail on the head.
Our best hope lies in members of Congress acknowledging that they abdicated their responsibilities to control the growth in federal government spending a long time ago, when they put entitlements on autopilot. Rather than viewing delegation to an independent BRAC‐like fiscal commission as further abdication of Congress’ spending powers, it would reclaim that responsibility by putting in place a workable mechanism to get the job done.
Originally published by the Cato Institute. Republished with permission.
For more great content from Budget and Tax News.
For more from The Heartland Institute.