Michael A. Peterson, CEO of the Peter G. Peterson Foundation, commented today as Budget Reconciliation legislation moves through the U.S. House of Representatives. 

“If Congress takes no action, America will add $22 trillion of new debt over the next ten years, on top of our existing $36 trillion. The urgent conversation should be about how to reduce our debt, not add to it. 

“This irresponsible budget bill would significantly worsen America’s fiscal outlook and harm our economic future.  The legislation piles on trillions in red ink and includes a range of budget gimmicks that attempt to obscure its true cost. 

“We are at a critical policy moment, and financial markets are watching.  The deficit as a share of GDP is currently 6%, an extremely high level for a country with low unemployment and not at war.  The level of debt will soon exceed 100% of GDP, a level we have not reached since World War II.  As a result of this enormous debt, interest payments now exceed what we spend on national defense.  And our rapidly increasing debt lowers economic growth and puts upward pressure on interest rates and inflation, which we certainly don’t need. 

“Budget reconciliation should be a tool for improving our fiscal health, but this bill takes America in the opposite direction.  Lawmakers still have an opportunity to improve it by finding credible offsets and eliminating gimmicks.  It’s not too late for the fiscal leadership of paying for priorities, and there are many options available to improve the nation we leave to our children and grandchildren.”