The Joint Economic Committee (JEC) outlined its policy recommendations and suggestions for the House Budget Committee.
In the letter, the JEC called out the rapid expansion of public debt as a share of the economy. They said it represents a pressing risk for the United States, adding that growing deficits erode investor confidence, crowd out private and public investment, push up borrowing costs, and weaken economic growth. They called the rising debt-to-GDP ratio an existential threat to economic security.
The recommendations focus on solutions to rein in and slow the growth of federal debt.
Among the recommendations, they said that healthcare accounted for more than one-quarter of federal spending in FY2024 and it continues to grow more quickly than other categories. They believe that policymakers should focus on realigning incentives to cure underlying diseases to alter healthcare cost projections.
In addition, they cited concerns about the nation’s demographics. Americans are aging and leaving the workforce while the fertility rate is not high enough to effectively replace them. Reforming the U.S.’ immigration policies will benefit the system and reduce deficits.
Also, they noted that increasing output per worker is critical to addressing economic challenges. However, bottlenecks created by government intervention often inhibit productivity gains that would otherwise bolster innovation and growth. A critical first step is the recent pro-growth tax and regulatory policies. But the JEC says more can be done to stimulate employment and economic growth.
“The nation continues to navigate a precarious path toward fiscal insolvency, and it demands urgent action to avoid catastrophic consequences,” Rep. David Schweikert (R-AZ), chairman of the JEC, said. “Congress should prioritize policies that facilitate high-skilled immigration, strategically promote technological innovation, work to build a healthier population, and enable economic expansion as solutions to America’s pressing challenges.”