Senators Introduce 3% Fiscal Target Resolution
Note - Parts of this blog are an update to our previous blog on the House version of the 3% fiscal target resolution.
Senators Kevin Cramer (R-ND) and Angus King (I-ME), along with Senators Dave McCormick (R-PA) and Gary Peters (D-MI), recently introduced a resolution in support of a 3% deficit-to-Gross Domestic Product (GDP) target.
Lowering deficits to 3% of GDP would have immense fiscal and economic benefits for our nation, which is why the 3% target has been strongly endorsed by the Board of the Committee for a Responsible Federal Budget.
The introduction of the resolution in the Senate illustrates the growing momentum behind the 3% fiscal target. The target was the focus of a recent House Budget Committee hearing, in which lawmakers and witnesses from both sides of the aisle agreed that we need to tackle our fiscal challenges and that adopting a 3% deficit-to-GDP target is a reasonable way to do so. We have compiled a list of lawmakers and outside experts who have expressed support for the 3% target here.
The resolution expresses the sense of the Senate that the United States should reduce and maintain the federal unified budget deficit at or below 3% of GDP while acknowledging that the deficit for fiscal year 2025 was roughly 6% of GDP, and interest costs are now projected to total over $1 trillion each year going forward. It also declares that the national debt represents a threat to national security and economic growth, and risks increasing interest rates and the cost of living.
The resolution also states that deficit reduction is best achieved when lawmakers have a manageable, meaningful fiscal goal to aim for. In addition to describing the rationale for the target, the resolution outlines potential enforcement mechanisms, laying the groundwork for the next steps Congress can take to reach the 3% of GDP deficit target.
The resolution recommends several such steps, including:
1. The President should submit budgets designed to create a path to meet and sustain the target
2. The Congressional budget resolution should set allocations consistent with meeting the target on schedule
3. The Senate Budget Committee should recommend enforcement options, and the Senate Rules and Administration Committee should recommend changes to the Senate rules to ensure compliance with a 3% of GDP deficit target.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, praised the resolution's introduction (full statement here):
With debt approaching record levels and interest costs exploding, there is finally real momentum behind the idea of bringing our deficits down to reasonable levels. There’s now support for a 3% of GDP deficit target in both parties, both chambers of Congress, and the two branches of government involved in the budget process – not to mention some of the nation’s top thought leaders and countries around the world.
