Skip to content
Search

Latest Stories

Top Stories

GOP Takes Charge, Faces Huge Fiscal Hurdles

GOP Takes Charge, Faces Huge Fiscal Hurdles

WASHINGTON, DC - JANUARY 03: U.S. Speaker of the House Mike Johnson speaks after winning the speakership for the 119th Congress at the US Capitol on January 3, 2025 in Washington, DC. Mike Johnson on January 3 won re-election for the U.S. House speaker in a slim Republican majority, after swaying two out of the three members of his party who had joined Democrats to block his bid.

(Photo by Sha Hanting/China News Service/VCG via Getty Images)

The GOP has a tough task ahead: dealing with a looming financial crunch in Washington next year. Key parts of the 2017 Tax Cuts and Jobs Act (TCJA) will expire, adding to the national debt, which has already hit $36.1 trillion. Contributing to the problem, the spending ceiling under the Pay-As-You-Go Act will require $190 billion in cuts, and enforceable caps on discretionary spending will also end. If Congress doesn’t act, an additional $5 trillion could be added to the debt in the coming year, according to the Economic Policy Innovation Center.

Investors are growing increasingly concerned about the rising national debt. Despite the Federal Reserve cutting rates, economists are worried about climbing bond yields, while Treasury officials are concerned about weak bond sales this year. Meanwhile, new interest payments on the debt have leap-frogged over the defense budget as the fastest-growing item of the federal budget.


There is no easy fix. Congress must change its recent behavior and start acting responsibly. It must begin by weighing the long-term consequences of any decisions.

The TCJA has been credited with boosting economic growth and generating tax revenue. But, at the same it also helped to increase the national debt. As Congress reconsiders the law, it should keep the parts that spur investment and economic growth. For instance, the 20% tax deduction for pass-through businesses and the ability to write off capital investments immediately are keepers.

Sign up for The Fulcrum newsletter

Despite the GOP’s insistence to the contrary, not every tax cut in the TCJA should be continued. GOP proposals like cutting the corporate tax rate even further would add billions to the deficit. Another in the must-to-avoid category is universal tariffs, which are likely to send the economy into a tailspin by increasing inflation, alienating trade partners, and, generally, harming American consumers’ finances.

As usual, Congress is focused on the wrong culprit. What truly drives our debt problem is non-discretionary spending. Social Security and Medicare are predicted to grow rapidly as more Americans retire. While, at the same time, interest payments on the debt will continue to expand. Taken together, these three parts of the budget will account for 77% of total spending growth over the next ten years.

The types of reforms advocated by Elon Musk and others, like ending telework for federal workers, might save some money, but by themselves will not fix the larger problem. Congress must be willing to address the primary drivers of the ballooning debt: entitlements and interest payments. However, it must fix these problem areas without at the same time imposing undue burdens on middle-class families.

One area where Congress can make a big impact is by closing tax loopholes. These special exclusions, deductions, and credits add up to $1.8 trillion a year in foregone revenue and mainly help high-income earners and businesses. Examples include tax breaks for employer-provided health insurance, capital gains from home sales, and municipal bonds.

Another budget buster is the well-intentioned $7,500 electric vehicle subsidy from Biden’s Inflation Reduction Act. This government program could be adjusted to better target middle- and low-income Americans. The same reasoning applies to other tax benefits like the student loan interest deduction and housing credits, which should also focus on less affluent Americans.

The national debt is a complex problem that won’t be solved with glib rhetoric and fiscal band-aids. To get the country on the right track, Congress will need to do two things: responsibly reduce spending and improve the tax code to ensure everyone pays their fair share. Protecting critical programs like Social Security and Medicare must remain a priority. Still, reforms—like negotiating drug prices or lifting the income cap on payroll taxes—can help make these programs sustainable.

Besides closing loopholes that primarily help high-end taxpayers, reducing tax loopholes for special interests and big corporations, especially if they have used these benefits to their financial advantage in the past, should also be seriously considered.

The challenge will be balancing fiscal responsibility with the need to invest in healthcare, education, and infrastructure to support the economy long term.

The new GOP-led Congress has a tough road ahead. But with smart, fair decisions, lawmakers can help avoid a fiscal crisis while building a stronger foundation for future generations.

Robert Cropf is a professor of political science at Saint Louis University.

Read More

A small earth by a book, scale of justice, and gavel.​

A small earth by a book, scale of justice, and gavel.

Getty Images, Tanankorn Pilong

Project 2025: Dramatic Environmental Changes Enacted

Last spring and summer, The Fulcrum published a 30-part series on Project 2025. Now that Donald Trump’s second term has started, Part 2 of the series has commenced.

In August 2024, The Fulcrum published an in-depth column on the Department of the Interior, examining how the implementation of Chapter 16 of Project 2025 could dramatically alter environmental protections in the United States.

Keep ReadingShow less
An illustration of diverse people around a heart with the design of the American flag.
An illustration of diverse people around a heart with the design of the American flag.
Getty Images, wildpixel

The Next Hundred Days: America's Latest Test of Democracy

For decades, we have watched America wrestle with its demons. Sometimes, she has successfully pinned them down. Other times, the demons have slipped beyond her grasp. Yet, America has always remained in the ring. There is no difference right now, and the stakes couldn't be higher.

Across America, from small-town council meetings to state legislatures, there's a coordinated effort to roll back the clock on civil rights, geopolitical relations, and the global economy. It's not subtle, and it's not accidental. The targeting of immigrants and citizens of color has become so normalized that we risk becoming numb to it. For example, what happened in Springfield, Ohio, late last year? When national politicians started pushing rhetoric against Haitian immigrants, it wasn't just local politics at play. It was a test balloon, a preview of talking points soon echoed in halls of government and media outlets nationwide. Thus, this is how discrimination, intolerance, and blatant hate go mainstream or viral—it starts small, tests the waters, and spreads like a virus through our body politic and social system.

Keep ReadingShow less
Debate on Antisemitism Awareness Act Weighs the Restraint of Freedom of Speech

Committee ranking member Sen. Bernie Sanders (I-VT) delivers remarks during a Senate Committee on Health, Education, Labor and Pensions committee vote on the nomination of Lori Chavez-DeRemer as the next Secretary of Labor February 27, 2025 in Washington, DC

Getty Images,

Debate on Antisemitism Awareness Act Weighs the Restraint of Freedom of Speech

WASHINGTON—Some Senate Democrats voiced concerns this week about damage to free speech due to a new law that would define antisemitism. However, several Democrats co-sponsored the bill with most Republicans.

“I worry that this bill is unconstitutional and will move us far along the authoritarian direction that the Trump administration is taking us,” said Sen. Bernie Sanders (I-Vt.) at Wednesday’s hearing in the Senate Health, Education, Labor and Pensions (HELP) Committee.

Keep ReadingShow less
A Missed Opportunity

Broken speech bubbles.

Getty Images, MirageC

A Missed Opportunity

en español

In a disappointing turn of events, Connecticut has chosen to follow the precedent set by President Donald Trump’s English-Only Executive Order, effectively disregarding the federal mandates of Title VI of the 1964 Civil Rights Act.

Keep ReadingShow less