The Government Accountability Office on Wednesday released a new analysis of the nation’s fiscal health, and the diagnosis is not good.
“Our nation faces serious challenges at a time when the federal government is highly leveraged in debt by historical norms,” the report says. “The imbalance between revenue and spending built into current law and policy have placed the nation on an unsustainable long-term fiscal path.”
To get a better handle on the fiscal situation, GAO recommends that lawmakers develop a long-term fiscal plan that relies on rules and targets to limit deficits now and in the future. The agency’s 48-page report lays out a variety of options lawmakers could deploy, ranging from clearly defined limits on revenues and spending to targets for the size of the annual deficit, and examines how such tools have performed in other countries, including Germany and the Netherlands.
“No process can force choices that policymakers are unwilling to make,” the report says. “However, agreement on a fiscal goal can assist in framing the difficult choices that must then be made in designing the mix of fiscal rules and targets adopted.”