U.S. Treasury Secretary Scott Bessent has reiterated his commitment to reducing the federal deficit to 3% of GDP, a goal that contrasts with current government budget projections. This pledge was made during recent congressional hearings before both the Senate Finance Committee and the House Ways and Means Committee.
Current Projections and Challenges
The administration’s fiscal 2027 budget forecasts deficits exceeding 5% of GDP through 2029. The Congressional Budget Office (CBO) projected that the federal deficit will reach 5.8% of GDP in fiscal year 2026, with no significant decrease expected over the next decade. Debt held by the public has reached 101% of GDP, the highest since World War II.
Bessent, however, reported to the House committee that the deficit had fallen to 5.5% of GDP, a figure not yet reconciled with the CBO’s projections. The federal government is expected to spend over $1 trillion on interest payments alone in fiscal year 2026, surpassing all discretionary defense spending.
Bipartisan Support and Legislative Efforts
Despite these challenges, a bipartisan group of House members supports H.Res. 981, a nonbinding resolution aiming to reduce the deficit to 3% of GDP by 2030. The resolution, introduced by Rep. Bill Huizenga, R-Mich., and Rep. Scott Peters, D-Calif., has 20 cosponsors from both parties but remains in committee without further action.
Rep. Lloyd Smucker, R-Pa., highlighted the resolution’s bipartisan backing during a House hearing, emphasizing the importance of addressing the nation’s debt trajectory. Bessent has publicly endorsed the resolution, citing his concern over the fiscal future as a reason for leaving his finance career.
Long-Term Fiscal Outlook
The federal government has not seen a budget surplus since 2001, with deficits exceeding 3% of GDP annually since 2015. The Social Security trust fund is projected to be exhausted by 2032, potentially reducing benefits by 28% without congressional intervention.
Experts from the Penn Wharton Budget Model warn that the U.S. has about 20 years to alter its fiscal course before the national debt reaches unsustainable levels. Kent Smetters, faculty director of the model, cautioned that a lack of congressional action could lead to immediate financial instability.
Original reporting: KTBS 3 (Shreveport) — read the source article.
