No nation, including the United States, is exempt from the laws of prudent finance

OPINION:

Now that the speaker’s race is over, it is time to focus on what the agenda should be for this Congress. The Republicans control the House, and the Democrats control the Senate. This means we will see a number of oversight hearings and investigations in the House, but we could see more stalemates on the Hill in connection with major legislative issues.

Suppose the new Congress listens to the public. In that case, leaders will focus on fighting inflation, promoting energy security and sustainability, securing the border coupled with immigration reform, China/Ukraine, and addressing rising crime rates. At the same time, Congress needs to focus on restoring fiscal sanity and sustainability if we want to avoid much bigger economic, national security, foreign relations and domestic tranquility challenges in the future.

Congress passed a bloated and earmark-laden $1.7 trillion omnibus funding (appropriations) bill for fiscal 2023 before leaving town for the year. Shockingly, Congress has passed all appropriations bills before the beginning of the federal fiscal year just four times since 1951! Clearly, the process is broken and in need of reform. This should include returning to regular order for the budget and appropriations process coupled with adopting biennial budgeting and separating operating and capital budgets like many states.

The new Congress will also have to deal with bumping up against the debt ceiling in 2023. Contrary to assertions by some, the federal government cannot default on its debt since payments on the debt and the related interest amounts are guaranteed by the 14th Amendment to the Constitution. Therefore, if we ever do hit the statutory debt ceiling, Congress would have to cut spending, raise taxes or both to make the numbers work.

These are two things that Congress does not like to do, which is why they “cry wolf” and falsely claim that the debt ceiling must be raised to avoid a default. It is also clear that the current statutory debt ceiling has failed to control increasing federal spending and debt burdens. It has stimulated more partisan diatribes than policy debates. As a result, it should be repealed and replaced with a more intelligent and enforceable fiscal constraint mechanism focused on achieving reasonable and sustainable public debt/gross domestic product levels.

Speaking of defaults, when is Congress going to deal with the fact that the Medicare Hospital Insurance Trust Fund is set to run dry by 2028 and the combined Social Security Trust Funds are set to go to zero by 2035?

Failure to reform these programs and make them solvent, sustainable and secure will result in annual shortfalls of 15% to 20% and 20% to 25%, respectively, and real defaults, and these percentages will grow over time. These important social insurance programs are not guaranteed by the Constitution, and the related benefits can be paid only from trust fund assets under current law. It is time to create a nonpartisan commission(s) to engage the American people and make recommendations to Congress in connection with these programs well in advance of a potential default. The longer Congress waits to act, the greater the changes will need to be, and the less transition relief will be able to be provided. The president also needs to nominate, and the Senate needs to confirm, two public trustees for Social Security and Medicare. These positions have been unfilled for several years.

History has shown that past statutory approaches to promote fiscal responsibility have failed. As a result, it is time to pursue a constitutional solution. Under Article V of the Constitution, there are two ways to achieve a constitutional amendment. The old-fashioned way is where two-thirds of the House and Senate propose an amendment and send it for ratification by three-quarters of the states. It also provides a second method whereby two-thirds of the states (34) can file an application with Congress, and once the requirement has been met, Congress shall call a Convention for Proposing Amendments.

Recent research revealed that 39 states had filed either plenary- or fiscal responsibility-specific applications in 1979, but Congress failed to act. This failure will result in the introduction of concurrent resolutions in both the House and Senate this year, calling for Congress to act. If Congress fails to act, efforts are underway to have one or more states file a mandamus action to compel Congress to act. Like President Biden’s proposed forgiveness of student loans, this unprecedented action would have to be decided by the Supreme Court.

No nation, including the United States, is exempt from the laws of prudent finance. In fact, as the nation with the world’s leading reserve currency, we have a special obligation to “lead by example,” which we have failed to do. Adopting a constitutional amendment that forces Congress to maintain public debt/GDP at a reasonable and sustainable level is a prudent way to discharge our fiduciary and stewardship responsibilities to ensure that our collective future can be better than our past.

• David M. Walker is the former comptroller general of the United States.