Key Takeaways
- •The committee debated a bipartisan proposal to establish a 3% deficit-to-GDP target over ten years to stabilize the national debt and provide a predictable fiscal framework.
- •Maya MacGuineas (President, Committee for a Responsible Federal Budget) called the 3% target a "Goldilocks" metric that balances political feasibility with the necessity of stabilizing the national debt.
- •Rep. Arrington (R, TX-19) advocated for the 3% goal as a realistic alternative to balancing the budget, while Rep. Boyle (D, PA-2) criticized the fiscal impact of tax legislation.
- •Republicans argued that spending cuts and economic growth are primary solutions, while Democrats emphasized that revenue increases and addressing tax cut costs are essential for long-term fiscal sustainability.
- •Adopting this fiscal benchmark aims to reassure global markets and provide a bipartisan starting point for future budget negotiations to prevent a potential sovereign debt crisis.
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Hearing Analysis
Overview
The hearing examined the feasibility and strategic value of adopting a 3% deficit-to-GDP ratio as a primary fiscal target for the United States. With the national debt currently at 100% of the economy and interest payments surpassing defense spending, the discussion focused on whether a GDP-relative metric provides a more realistic and "achievable" framework for fiscal sustainability than traditional nominal balanced-budget goals. The session highlighted a rare area of conceptual agreement between fiscal hawks and progressive economists regarding the need to stabilize the debt-to-GDP ratio, though sharp partisan divisions remained over the specific policy "dials"—taxation versus spending cuts—required to reach that target.
Key Testimony & Policy
The witnesses generally coalesced around the idea that a 3% deficit target is a "Goldilocks" metric: aggressive enough to reassure global markets but realistic enough to avoid the political abandonment seen with previous fiscal rules. Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB), testified that reaching this target would require approximately $10 trillion in savings over a decade. She argued that while 3% is higher than ideal, it is the most viable starting point to prevent a "debt spiral" where interest rates exceed economic growth. Jonathan Burks of the Bipartisan Policy Center (BPC) warned that the U.S. is in a "parlous" state, noting that unlike previous debt peaks, the current level exists during a period of relative economic health rather than a global conflict or depression.
Kurt Couchman, Senior Fellow at Americans for Prosperity (AFP), advocated for institutional upgrades to support the 3% target. He specifically endorsed the Responsible Budget Targets Act (RBTA), which would provide a glide path to "structural primary balance" by adjusting for economic cycles. Couchman also promoted Rep. Blake Moore’s (R, UT-1) Comprehensive Congressional Budget Act to bring all spending, including mandatory programs, into the annual budget process. Conversely, Jared Bernstein, former Chair of the Council of Economic Advisers (CEA), cautioned that while the 3% goal is laudable, the method of achievement is paramount. He argued that the current fiscal gap is driven by a "revenue collapse" following successive tax cuts rather than a spending surge, noting that revenues as a share of GDP have failed to keep pace with historical norms during economic expansions.
The "One Big Beautiful Bill" (also referred to as the Working Families Tax Cut Act) was a central policy touchstone. Republicans praised the bill for including measures to root out waste, fraud, and abuse in the Centers for Medicare & Medicaid Services (CMS) and for promoting growth. Democrats, however, cited Congressional Budget Office (CBO) projections that the bill would increase the national debt by $4.7 trillion over ten years and lead to millions losing healthcare coverage.
Notable Exchanges & Partisan Dynamics
The hearing was marked by significant friction regarding the absence of Office of Management and Budget (OMB) Director Russ Vought. Ranking Member Brendan Boyle (D, PA-2) criticized Vought for being "MIA" for 15 months, suggesting he was avoiding scrutiny over the "One Big Beautiful Bill" and the costs of the ongoing conflict with Iran. Chairman Jodey Arrington (R, TX-19) countered by emphasizing the need for a bipartisan "glide slope" to fiscal health, urging members to move past political point-scoring to agree on a shared framework.
A recurring point of contention was the cost of the war in Iran. Rep. Lloyd Doggett (D, TX-37) and Rep. Becca Balint (D-VT) attacked the administration's request for a $200 billion supplemental for the conflict, contrasting that sum with the $27 billion needed to extend Affordable Care Act (ACA) tax credits. Rep. Doggett characterized the rising fuel costs as a "Trump war tax." On the Republican side, Rep. Andrew Clyde (R, GA-9) and Rep. Josh Brecheen (R, OK-2) focused on the "generational theft" of debt, with Rep. Brecheen using the "marshmallow test" analogy to criticize Congress's inability to delay gratification in spending—a metaphor Rep. Balint later dismissed as "debunked" and socioeconomically biased.
Organizations Mentioned
* **Congressional Budget Office (CBO):** Cited frequently for its projections on the long-term debt trajectory and the $4.7 trillion deficit impact of the "One Big Beautiful Bill." * **Americans for Prosperity (AFP):** Represented by witness Kurt Couchman; the organization advocated for the Responsible Budget Targets Act and a "Comprehensive Congressional Budget." * **Committee for a Responsible Federal Budget (CRFB):** Represented by Maya MacGuineas; the group provided the $10 trillion savings estimate required to hit the 3% target. * **Department of Government Efficiency (DOGE):** Mentioned by Rep. Buddy Carter (R, GA-1) and witnesses regarding efforts to cut waste, though MacGuineas noted it had not yet successfully tackled major drivers like defense procurement. * **Bipartisan Policy Center (BPC):** Represented by Jonathan Burks; the center's previous Domenici-Rivlin Commission was cited as a model for a potential new fiscal commission. * **Centers for Medicare & Medicaid Services (CMS):** Discussed in the context of the "One Big Beautiful Bill," specifically regarding Republican efforts to reduce "waste, fraud, and abuse" in provider taxes and eligibility. * **Office of Management and Budget (OMB):** Criticized by Democrats for the Director's refusal to testify before the committee.
What's Next
Chairman Arrington indicated that the committee intends to move toward a markup of a resolution formally adopting the 3% deficit-to-GDP framework. Several members, including Rep. Scott Peters (D, CA-50) and Rep. Jimmy Panetta (D, CA-19), expressed continued support for a bipartisan fiscal commission to "operationalize" the target. Additionally, the committee faces a looming legal deadline to adopt a budget resolution for the upcoming fiscal year, a task that remains unfulfilled for the current year. The potential expiration of various tax provisions and the ongoing costs of the Iran conflict are expected to dominate upcoming fiscal negotiations.
Transcript
The hearing will come to order. Welcome to the Committee on the Budget's hearing regarding the merits of deficit-to-GDP as a measure of our nation's fiscal health, with the goal of a glide slope from close to wartime, let's just say emergent levels of deficits to a 3 percent in 10 years. I've been looking forward to this conversation for some time, and I'm excited to have our witnesses here this morning and to get their insights and counsel on the matter and to debate this with my colleagues. Before I begin, we have some additional members or at least one joining us today. I don't know that he's here yet, but Bill Huizenga of Michigan has introduced a bill related to the 3 percent. There may be others, but I know he has a great interest in this, and we're going to waive him on today and ask unanimous consent that Mr. Huizenga be permitted to participate in today's hearing without objection, so ordered. Today we'll hear from a panel of expert witnesses, and I'd like to introduce them briefly, starting with Mr. Jonathan Burks, Executive Vice President for Economic and Health Policy at the Bipartisan Policy Center. Mr. Burks previously served as Chief of Staff to former Speaker of the House Paul Ryan, a policy advisor to former Senate Majority Leader Mitch McConnell, and policy director at the House Budget Committee. Welcome back. Mr. Kurt Couchman, good friend and fellow fiscal hawk, Senior Fellow for Fiscal Policy for Americans for Prosperity. Mr. Couchman previously served in the offices of several members of the House of Representatives. And then my dear friend, Ms. Maya MacGuineas, President of the Bipartisan Committee for a Responsible Federal Budget. Ms. MacGuineas previously worked at the Brookings Institution and on Wall Street as well. And then the Honorable Jared Bernstein, former Chair of the Council of Economic Advisers from 2023 to 2025. We all appreciate your time again and your insights today on this important matter. I yield myself such time as I may consume. We need to change our long-term budget framework as it relates to budget resolutions for the following reasons. We need to live in reality for one. We need to measure, we need the most meaningful measure of the fiscal health of our country. And I think debt and deficit-to-GDP by most expert accounts is a better way to do that than just nominal savings over any time period. The recent tradition, at least for Republicans, has been to establish a goal of balancing the budget in 10 years. When I was a freshman member, Mr. Bernstein, in 2017 on this committee, the savings required to balance was about $6 trillion or close to $6 trillion. Today it's $16 trillion. So while I'm all for ambitious goals, I think aspirational goals that are just politically impractical to achieve don't help anybody. In fact, in every endeavor I've undertaken, when you set goals beyond stretch and into impractical and unachievable, you give people an excuse to do nothing. So why not do a few things? Let's get a more meaningful measure of fiscal health, let's establish an achievable goal, and let's do something that is rare in this institution and novel to this committee, not since we took over, Brendan, but let's agree together as Republicans and Democrats, as proud lawmakers of the greatest country in the world, on this framework, and then we can debate the strategies and the inputs and what dials should move in what ways. And I think if we could do that, I think we would be, we would do much better to move this country onto a more fiscal, a sustainable fiscal trajectory. This 3 percent over 10-year goal has been endorsed by financial experts like Ray Dalio and Warren Buffett. I noticed it was also endorsed by Barack Obama, President Obama. But it's embraced by experts, economists, business leaders on both sides of the aisle, center-right, center-left, advocacy groups and think tanks like the ones represented today. I think people understood when the rating agencies downgraded us, I think was probably, they were a lot more patient maybe than they should have been, but when they did, their commentary included that they were looking for a plan, a long-term plan and a commitment from both parties to that plan. And again, when people elect Republicans in these two chambers, I think the strategies on how to achieve that should reflect that philosophy and the values of those voters. And when it shifts to Democrats, I would expect that it would reflect more of the Democrat strategies on how to achieve. But what we should agree on is that we're off the rails and we're in dangerous territory, and a debt-related crisis of any kind, including a sovereign debt crisis and undermining our reserve currency, would be potentially irreparable and unacceptable for everybody in this on this committee. And I believe that most if not every member here is concerned about it, it's just how we go about addressing it. So that's the debate today. Hopefully we'll have a hearing where we can mark it up and change the paradigm altogether so that we can again actually make real progress. And that progress, by the way, of getting the 3 percent, Scott Bessent, our Secretary of Treasury, mentioned it in his Senate confirmation hearing. Getting there would get us to lower than the average 50-year average on annual deficits. It would create the fiscal space to absorb some of the shocks like the conflict with Iran or some other exigent circumstance that we can't predict like another COVID. We're not particularly ready for that in my opinion, and that's a problem. So with that, I'm going to turn it over to my ranking member for as much time as you need to make your opening statement.
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