The nation’s finances have become a priority in Congressional debate as our mounting debt reached the $14.29 trillion mark in mid-May, hitting the existing debt ceiling. Unless Congress acts to lift the debt ceiling, the borrowing authority of the U.S. government may be exhausted this summer.

A national default would have a negative impact on the U.S. and global economic recovery. But raising the debt ceiling again, without substantive deficit reduction strategies in place, might also spook the markets.

Entitlement programs are a key driver of debt
Whatever short-term deal may emerge on the debt ceiling, proposed cuts in discretionary spending alone will not be enough to fix the debt problem. Since entitlement programs like Social Security and Medicare make up more than 40% of the federal budget already,* reforming these programs is part of the mainstream debate.

Adding to the pressure for reform, the government’s most recent estimates of the dates when both programs will become insolvent have accelerated since last year’s projections.

Addressing entitlement programs is an important part of restoring our national solvency.

If we could achieve a bipartisan agreement to curb federal spending and bring our deficits under control, it would be a huge confidence builder at home and around the world, and proof that America can master its fate. America has dealt with much tougher challenges before, and I am convinced that we can meet this one.

* Center on Budget and Policy Priorities, 2011.