Guest columnist Keith Peterson: To fix nation's debt problem, everything must be on the table

Let's be honest.

With our divided government, the Republican attempt to force through (choose your adjective - necessary or draconian) reductions in non-defense discretionary spending was never going to fly.

Given that Social Security, Medicare, Medicaid, Defense, Veterans programs, tax increases, and just about all of President Biden's main achievements - the Chips Act, Infrastructure, the Inflation Reduction Act (psst ... it's really a climate law) were all off the table, nothing particularly serious could get done.

Yes, by largely freezing non-defense discretionary spending you reset the baseline and can save, perhaps, $1.5 trillion over a decade. But that amounts to less than 10 percent of the projected annual deficits over the next 10 years.

So, let's be honest.

We have had a tumultuous economic roller coaster ride over the past two decades plus.

The last time we had a budget surplus (in FY2001, essentially the last year of the Clinton presidency) our federal budget was about $1.86 trillion; out budget surplus was about $128 billion, and our national debt stood at less than 60 percent of GDP.

Then this happened: The collapse of the dot.com boom; the Bush tax cuts; 9/11 and the creation of the Department of Homeland Security; the wars in Iraq and Afghanistan; the financial collapse and the Great Recession; tax hikes under Obama and the Affordable Care Act; the Trump tax cuts; the pandemic; and then the war in Ukraine. So, what's next?

All these things have had a significant impact on our spending and our revenues. During the end of the Trump presidency the annual deficit had risen to nearly $1 trillion despite a robust economy because of his tax cuts for the wealthy and corporations. Then the pandemic struck and the federal government shoveled trillions into the economy to keep it afloat and the annual deficit ballooned to more than $3 trillion in FY2020. Though a good deal of that was bipartisan.

So, let's be honest.

If there is going to be a serious effort to bring revenues and expenditures in line, everything is going to have to be on the table.

The agreement just signed could have created a bipartisan working group to look at entitlement spending - Social Security and Medicare - with its report due right after the 2024 election because the first year of a second-term presidency is about the only time in a political calendar to get something really major done.

The agreement could have created a second working group on comprehensive immigration reform because we have a shortage of workers in this country and more workers equals more economic growth and more tax revenue.

The agreement preserves most of the $80 billion (over 10 years) that will go to the IRS to help with customer service, automation, and enforcement. About $400 billion in taxes goes uncollected each year either because of inadvertent mistakes or fraud. The Biden plan might capture a third of that.

We learned during the pandemic that we don't have a national healthcare system - just a lot of separate entities - but our only hope of getting a handle on our healthcare costs is to double down on programs that promote wellness and prevent serious keconditions before they become crises.

So, let's be honest.

We have a $31.4 trillion national debt, about 121 percent of GDP. We have a federal budget that totaled $6.27 trillion for FY2022 and given the claims that my generation is making on Social Security and Medicare that is not about to shrink much at all.

We are a large, dynamic, wealthy country that demands a great deal from its government. Rising interest on the debt can make those demands harder to meet. The only viable path forward is to vote for politicians who will be honest with us.

• Keith Peterson, of Lake Barrington, served 29 years as a press and cultural officer for the United States Information Agency and Department of State. He was chief editorial writer of the Daily Herald 1984-86.