Path to Debt Stabilization: A Comparison of Debt Triggers

The President’s Plan for Economic Growth and Deficit Reduction included a detailed legislative proposal intended to enforce a declining path for the federal debt, beginning in 2013. This “debt trigger” mechanism is similar to a proposal that the Peterson-Pew Commission on Budget Reform has developed over the last two years.

A new memo posted on the Commission’s One-Stop Shop for Budget Reform Tools resources page describes the similarities and differences between the debt trigger proposed by the President, and the mechanism recommended in the Peterson-Pew Commission’s November 2010 report, Getting Back in the Black.

As we say in the memo,

The President is to be commended for reinforcing his commitment to lowering the debt by proposing legislation to establish a permanent mechanism to impose automatic reductions in spending and tax expenditures unless the federal debt is on a declining path starting in 2014.

Although we're encouraged to see debt put on a downward path, as we've mentioned here, we're concerned that debt would be nearly stabilized at too high of a level -- though this idea would show progress in the right direction.

Click here to check out this new addition to our one-stop budget reform resource page, Path to Debt Stabilization: A Comparison of Debt Triggers.

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