A start to fixing the budget problem in the United States

 

The Balanced Budget and National Debt Reduction Act (BBNDRA)

Section 1. Short Title

This Act may be cited as the “Balanced Budget and National Debt Reduction Act” or BBNDRA.

---

Section 2. Findings and Purpose

1. Findings:
   1.1. The United States’ growing national debt and recurring budget deficits pose long-term risks to economic stability, national security, and future generations’ prosperity.
   1.2. Balancing the federal budget and reducing the national debt require a combination of responsible spending, efficient government operations, and prudent revenue measures.
   1.3. A clear framework for deficit reduction and debt management can foster market confidence, promote sustainable economic growth, and safeguard critical public investments.

2. Purpose:
   2.1. To establish enforceable spending and revenue targets that achieve a balanced budget over a defined timeframe.
   2.2. To create mechanisms that gradually reduce the national debt through consistent annual debt-reduction milestones.
   2.3. To enhance transparency, accountability, and government efficiency by enacting structural reforms and limiting unwarranted federal spending.

---

Section 3. Definitions

For purposes of this Act:

1. Balanced Budget: A federal budget in which total outlays for a fiscal year do not exceed total receipts.
2. Debt-to-GDP Ratio: The ratio of the total national debt to the nation’s Gross Domestic Product (GDP).
3. Primary Deficit: The difference between current federal spending (excluding interest payments on the debt) and current federal revenue for a given fiscal year.
4. Sequestration: Automatic across-the-board spending cuts triggered if budgetary targets set by this Act are not met.

---

Section 4. Timetable for Balancing the Budget

1. Fiscal Targets:
   1.1. Beginning in Fiscal Year (FY) 2026, the federal budget shall reduce the primary deficit by at least 10% per year until the budget is balanced, relative to the primary deficit for FY 2025.
   1.2. No later than FY 2032, total federal outlays shall not exceed total federal receipts, achieving a fully balanced budget.

2. Annual Reporting:
   1.1. The Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) shall jointly certify the nation’s compliance with the annual deficit reduction target.
   1.2. If the annual target is not met, provisions in Section 8 (Sequestration) shall be triggered unless new legislative measures are enacted to correct the shortfall.

---

Section 5. National Debt Reduction Strategy

1. Debt Reduction Milestones:
   1.1. Beginning in FY 2026, the Secretary of the Treasury shall publish an annual Debt Reduction Report establishing year-by-year targets to reduce the debt-to-GDP ratio.
   1.2. These targets shall aim to lower the debt-to-GDP ratio by a minimum of 2% every two (2) years from the FY 2026 level, continuing until it falls below 60%.

2. Mandatory Debt Payments:
   1.1. Any budget surplus achieved under this Act shall be applied toward the principal reduction of publicly held debt.
   1.2. Such payments shall be allocated automatically unless Congress directs otherwise via legislation signed into law by the President.

---

Section 6. Revenue and Tax Policy

1. Revenue Stabilization Measures:
   1.1. A bipartisan commission, formed by the Chairpersons of the House Committee on Ways and Means and the Senate Committee on Finance, shall review tax policies annually to recommend adjustments that ensure stable revenue streams.
   1.2. Recommendations may include reducing tax loopholes, simplifying the tax code, or adjusting rates for high-income earners to meet revenue shortfalls.

2. Pay-As-You-Go (PAYGO) Rule:
   1.1. All newly proposed mandatory spending increases or tax cuts must include corresponding revenue increases or spending offsets to maintain budget neutrality.
   1.2. Any legislation failing to meet PAYGO requirements shall be subject to an automatic sequestration in an amount sufficient to offset the fiscal impact.

---

Section 7. Spending Reforms and Efficiency

1. Spending Caps:
   1.1. Discretionary spending caps shall be imposed for all major federal departments and agencies, subject to adjustment only by a three-fifths supermajority vote in both the House of Representatives and the Senate.
   1.2. The caps shall be set at levels consistent with the annual deficit reduction goals in Section 4 and the debt reduction targets in Section 5.

2. Program Performance Reviews:
   1.1. Every federal department and agency shall undergo a biannual performance audit by the Government Accountability Office (GAO).
   1.2. Programs identified as duplicative, inefficient, or redundant shall be consolidated, restructured, or eliminated. Savings realized shall be redirected to deficit and debt reduction, or to sustain critical programs with demonstrated high effectiveness.

3. Fraud and Waste Reduction:
   1.1. The Inspector General of each federal agency shall establish a comprehensive program to detect and prevent fraud, waste, and abuse of public funds.
   1.2. The OMB shall publish an annual report quantifying recovered funds and cost savings related to fraud-prevention measures.

---

Section 8. Sequestration Enforcement

1. Triggering Sequestration:
   1.1. If the federal government fails to achieve the annual deficit reduction target under Section 4 or if spending caps under Section 7 are exceeded, sequestration shall be triggered automatically.
   1.2. Sequestration cuts shall be applied across non-exempt discretionary and mandatory programs to the degree necessary to realign expenditures with the targets.

2. Exempt Programs:
   1.1. Certain essential programs, including Social Security retirement benefits and Veterans’ benefits, may be exempt from sequestration to protect vulnerable populations.
   1.2. The Director of the OMB, in consultation with Congress, shall compile a list of any newly exempt programs and provide justification for exemption in the annual budget submission.

3. Release from Sequestration:
   1.1. Sequestration measures remain in effect until compliance with the targets is certified by the OMB and CBO.
   1.2. Congress may pass corrective legislation with a three-fifths supermajority in both chambers to override or modify sequestration.

---

Section 9. Transparency and Public Accountability

1. Public Debt Dashboard:
   1.1. The Department of the Treasury shall maintain an online, real-time dashboard tracking the national debt, deficit levels, and progress toward meeting the goals set forth in this Act.
   1.2. This dashboard shall be freely accessible to the public and updated at least monthly with clear data visualizations.

2. Citizen Oversight Board:
   1.1. A non-partisan Citizen Oversight Board of up to fifteen (15) members appointed by the Comptroller General shall review budgetary data and hold public forums to solicit input on federal spending priorities.
   1.2. The Board’s findings shall be submitted to Congress and publicly posted.

---

Section 10. Effective Date and Severability

1. Effective Date:
   1.1. This Act shall take effect one hundred eighty (180) days after its enactment.
   1.2. The Secretary of the Treasury, in consultation with the OMB and relevant congressional committees, shall promulgate any necessary regulations within that timeframe.

2. Severability:
   1.1. If any provision of this Act, or its application to any person or circumstance, is held invalid by a court of competent jurisdiction, the remainder of this Act and the application of that provision to other persons or circumstances shall not be affected.

Strategies for the U.S. Government to Balance the Budget: A Comprehensive Approach

 Balancing the U.S. budget is no small feat. It requires tough choices, disciplined fiscal policies, and an approach that balances growth with responsibility. Here are several key strategies the government can employ to move toward a balanced budget while minimizing economic disruption and supporting essential services.

1. Reduce Excessive Spending in Discretionary Areas

• Defense Spending Efficiency: Defense is one of the largest parts of discretionary spending. While a strong defense is essential, there are areas where spending can be made more efficient without compromising national security. Conducting thorough audits to eliminate unnecessary programs and reduce overhead costs can help achieve this.
• Streamline Government Operations: Reducing redundancies across federal agencies and implementing technology to automate certain functions can cut down administrative costs. Agencies should conduct regular audits to identify overlapping programs or positions and merge roles where possible to improve efficiency.

2. Entitlement Reform for Long-Term Sustainability

• Gradual Adjustments to Social Security and Medicare: These programs represent a significant portion of federal spending and will continue to grow as the population ages. Small, incremental changes—such as gradually raising the retirement age or adjusting benefit formulas—can help reduce costs over time without drastic impacts on current beneficiaries.
• Introduce Means Testing: Implementing means testing for certain benefits (particularly for Social Security) could ensure that resources go primarily to those who need them most. This would help preserve these programs for future generations and reduce unnecessary spending on high-income earners.

3. Close Tax Loopholes and Reform the Tax Code

• Eliminate Corporate Tax Loopholes: Many corporations use loopholes to reduce their tax burden significantly. Closing these loopholes and ensuring companies pay their fair share would increase revenue without raising tax rates.
• Limit Deductions and Exemptions for High Earners: Caps on deductions for high-income individuals can prevent excessive write-offs and ensure a fairer tax contribution from those who benefit most from the economy.
• Reform Capital Gains Tax Rates: Taxing capital gains more in line with earned income could increase revenue from high-net-worth individuals. Structuring this as a gradual increase, or only applying it above a certain threshold, could prevent discouraging investment while still capturing revenue.

4. Implement Targeted Revenue Increases

• Carbon Tax or Environmental Fees: Implementing a carbon tax or other environmental fees not only provides a new revenue source but also encourages companies and individuals to reduce emissions. Revenue from a carbon tax could be used to offset costs related to climate change or infrastructure repair.
• Increase Taxes on Luxury Goods: Increasing taxes on non-essential luxury goods (like yachts or private jets) is unlikely to affect middle- and lower-income earners and can provide additional revenue.
• Restore Estate Taxes: Restoring or increasing the estate tax for ultra-high-net-worth estates can help ensure that wealth is circulated and taxed appropriately, providing funds for the public good.

5. Promote Economic Growth to Increase Tax Revenue

• Invest in Infrastructure: Funding infrastructure projects, such as improving roads, bridges, and public transportation, can create jobs, stimulate local economies, and increase long-term productivity. Improved infrastructure also supports commerce and tourism, leading to higher tax revenues.
• Support Small Businesses and Innovation: Small businesses are major job creators and contribute significantly to tax revenue. Policies that support entrepreneurship, such as reduced barriers to entry, simplified tax filing, and access to capital, can spur economic growth, generating additional revenue.

6. Focus on Healthcare Cost Control

• Negotiate Drug Prices: Allowing Medicare to negotiate drug prices could substantially reduce healthcare costs, as the U.S. currently pays some of the highest prices for prescription drugs in the world. Lower drug prices would reduce the federal government’s healthcare burden and save consumers money.
• Promote Preventive Healthcare: Preventive care can reduce the long-term costs associated with chronic illnesses, which are some of the biggest drivers of healthcare expenses. Encouraging preventive care and early intervention through public health campaigns and coverage incentives can lead to healthier outcomes and lower costs.
• Expand Health Coverage Efficiency: Integrating electronic health records and coordinating care across providers can reduce redundancy and improve efficiency in federal healthcare programs, ultimately cutting down costs.

7. Establish a Bipartisan Deficit Reduction Plan

• Set Clear Deficit Reduction Goals: Agreeing on a bipartisan plan that sets gradual deficit reduction goals would help maintain fiscal discipline without sudden cuts that could disrupt the economy.
• Create a Balanced Budget Amendment: While controversial, a balanced budget amendment or some form of fiscal rule could ensure that future budgets are created with restraint. Certain provisions could allow temporary borrowing during recessions or emergencies but require balanced budgets during stable times.

8. Reevaluate Subsidies and Tax Breaks

• Reduce Fossil Fuel Subsidies: The government provides substantial subsidies to fossil fuel companies. Redirecting some of these subsidies to renewable energy sources can both reduce spending and support cleaner energy.
• Phase Out Ineffective Corporate Subsidies: Some corporate subsidies no longer serve a critical purpose, especially in industries that are already profitable. Phasing out subsidies that do not benefit the public can save billions in government spending.

In Conclusion

Balancing the U.S. budget is challenging but achievable through a blend of strategic spending cuts, targeted revenue increases, and policies that foster economic growth. By reforming entitlements, closing tax loopholes, controlling healthcare costs, and creating a bipartisan deficit reduction plan, the government can work toward fiscal responsibility without sacrificing essential services or economic stability. Balancing the budget requires tough choices, but these strategies can help the U.S. move toward a more sustainable fiscal future.