Syndicated columnist Veronique de Rugy: Congress has a fiscal road map; it just needs to use it

Dealing with high inflation and an increasingly shaky economy, Americans are forced to make tougher spending choices. With public debt at an all-time high, government should do the same. This feat isn't that hard now that the Congressional Budget Office (CBO) has released a series of budget options showing Congress how to do it.

It's worth repeating that maintaining spending at the current level is not a viable option. Given the dramatic increase in annual federal government spending over the next 30 years - from 22.3% of GDP to 30.2% - combined with federal tax revenues that have remained fairly constant at around 19%, CBO projects that future deficits will explode. It's forecast to triple from 3.7% of GDP today to 11.1% in 2052. Over the next 10 years, primary deficits (deficits excluding interest payment on the debt) amount to $7.7 trillion. Meanwhile, deficits with interest payments total $15.8 trillion - roughly $1.6 trillion a year. Note, by the way, that half of our future total deficits will be driven by interest payments on the debt.

Given these realities, no one will be surprised that the ratio of debt to GDP, now roughly 100%, will, under the most conservative estimations, jump to 110% in 10 years. In the next 30 years it will likely double. More realistically, in 2052 debt as a share of GDP will be 260%. And that's assuming no major recessions or emergencies.

Despite these awful numbers, legislators in both parties are currently debating how best to add trillions more to the country's credit card balance. It is in this setting that the CBO published its report on budget options. The two-volume document highlights options for deficit reduction. One volume details large possible spending reductions while the other lays out small ones - so the options are plenty. They include important reforms of some of the major drivers of future debt: Medicare, Medicaid and Social Security.

All told, it's possible to achieve deficit reduction of $7.7 trillion over 10 years. That's enough to accomplish what some people mistakenly believe to be out of reach: balancing the budget without raising taxes. There are also a few options to simplify the tax code by removing or reducing unfair individual tax deductions and by cutting corporate welfare. For instance, it's high time for Congress to end tax deductions for employer-paid health insurance. A second good option is to cap the federal contribution to state-administered Medicaid programs. CBO also projects that Uncle Sam could reduce the budget deficit by $121 billion by raising the federal retirement age. CBO's option would up this age "from 67 by two months per birth year for workers born between 1962 and 1978.

Congress could save another $184 billion by reducing Social Security benefits for high-income earners. I support a move away from an age-based program altogether since seniors are overrepresented in the top income quintile. Social Security should be transformed into a need-based program (akin to welfare). Nevertheless, the CBO's option would be a step in the right direction.

There are so many more options for long-term deficit reduction. All Congress needs is a backbone. Considering the end-of-year spending bill going through Congress right now, I am not holding my breath.

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