Executive Summary 

• 9 out of 10 Americans believe the rising debt is driving up the cost of living, yet the bipartisan reforms needed to address the problem remain greatly out of reach amid persistent political polarization 
• A fiscal commission could provide a structured, bipartisan process for developing the structural changes to restore solvency to the major trust funds, reduce the debt, and create lasting fiscal discipline. 
• The failure of the 2010 Simpson-Bowles Commission demonstrates that bipartisan recommendations alone are insufficient; a successful fiscal commission must have enforcement mechanisms to increase the likelihood that its recommendations are enacted. 

Introduction 

With 9 out of 10 Americans concerned that rising debt is driving up the cost of living, the needed reforms seem greatly out of reach as Congress battles harsh partisanship and political imbalance. As public debt exceeds $31.99 trillion and annual budget deficits approach $2 trillion, concerns about the nation’s long-term fiscal position have intensified. At the same time, public confidence in Congress remains low, with approval hovering around 15 percent as of June 2026. Many Americans are increasingly concerned about the rising cost of living, while policymakers continue to struggle to reach bipartisan agreement on any reforms to improve the nation’s fiscal outlook. 

A fiscal commission is a potential path forward. By bringing together lawmakers from both parties and independent policy experts, a commission could help develop a comprehensive reform package to improve the nation’s fiscal position. However, the experience of the 2010 Simpson-Bowles Commission demonstrates that recommendations alone are insufficient. Without an enforcement mechanism, even bipartisan proposals can fail to be enacted. A commission modeled after the Base Realignment and Closure (BRAC) process could increase the likelihood of success by requiring Congress to vote up or down on a comprehensive reform package rather than allowing politically difficult provisions to be considered individually. 

The Current Landscape 

Economics played a central role in the 2024 elections, yet neither political party has secured lasting public confidence in its ability to address the nation’s fiscal and economic challenges. A May 2026 poll found that only 35 percent of Americans believe Democrats have the better approach to economic policy, while 31 percent favored Republicans, reflecting widespread skepticism toward both parties’ handling of the economy and ability to address the cost of living. This erosion of public confidence highlights the difficulty inherent in achieving durable bipartisan solutions through the traditional legislative process. 

The Debt 

A rising national debt has significant long-term consequences. As debt continues to grow, federal borrowing can slow income and wage growth and place upward pressure on interest rates. Higher interest rates increase borrowing costs for households and businesses, making mortgages, car payments, student loans, and business investment more expensive. Congress continues to run large deficits, and the debt-to-GDP ratio continues to rise, so does the cost of living. A one percentage point increase in the debt-to-GDP ratio translates into a 2 basis point increase in the inflation-adjusted 10-year interest rates. With current projections estimating a 20 percentage point increase in the debt-to-GDP ratio over the next decade, growing interest costs will continue to impact the cost of living. 

Persistent deficit spending not only increases debt-to-GDP, but can crowd out private investment. According to the Congressional Budget Office (CBO), for every additional dollar the federal government borrows, private investment falls by 33 cents. As deficit spending hurts the private economy, the government is unlikely to make small changes substantial enough to reverse the course.  

These fiscal pressures are driven largely by the growth in mandatory spending and interest payments on the debt. Total federal spending has increased from roughly 17 percent of GDP in fiscal year (FY) 2000 to roughly 23 percent of GDP in FY 2025. The budget deficit is projected to reach 6.7 percent of GDP by FY 2036, which will be almost twice the 50-year historical average of 3.8 percent of GDP. The widening of the deficit is mainly due to the growth of mandatory and interest payments, which will grow to $7 trillion and $2.1 trillion in 2036, according to a CBO estimate. 

Without structural reforms, the fiscal outlook is expected to worsen. Social Security and Medicare face growing financial shortfalls, while net interest is projected to become the single-largest federal expenditure by FY 2048. As a growing share of federal resources is devoted to servicing existing debt, lawmakers will have fewer resources available to respond to future economic downturns, national emergencies, or other policy priorities. 

The Politics 

Despite the significant fiscal consequences of high deficits and debt, Congress has repeatedly failed to enact lasting reforms, not because of a lack of policy solutions, but because of the political incentives facing lawmakers. Lawmakers operate on short election cycles, which incentivizes them to prioritize voters’ immediate concerns, such as affordability, over the long-term fiscal imbalances whose consequences materialize more gradually. 

Public opinion reflects this dynamic. A June 2026 Gallup poll found that among Americans who identified the economy as the most important issue, 40 percent cited the high cost of living as their main concern, while just 3 percent identified the federal deficit and debt as their primary concern. Although high deficits and debt contribute to long-term affordability challenges through higher borrowing costs and slower economic growth, those effects are less visible to voters than the prices of goods and services they encounter every day.  

Voters broadly support the idea of deficit reduction but often oppose the specific policy solutions required to achieve it. Polling shows that 79 percent of Americans have a fair amount or great deal of worry about federal spending and budget deficits. However, voters are more averse to specific policy changes. Another survey found that 79 percent of respondents oppose any Social Security benefits reductions, even though Social Security is the federal government’s single-largest individual U.S. expenditure. On the revenue side, 59 percent believe federal income taxes are too high. In other words, voters generally favor deficit reduction in principle but oppose many of the spending cuts or tax increases necessary to achieve it. These preferences create a difficult environment for lawmakers. Washington is largely responding to the incentives voters have created by delaying action. Unfortunately, this will only make the necessary future adjustments more aggressive and painful. 

Every member of Congress faces a straightforward political calculation. Supporting entitlement reform or increasing taxes can alienate constituents immediately. The benefits of a lower debt materialize years later, incentivizing lawmakers of both parties to postpone difficult fiscal decisions. 

Because the political process itself discourages lawmakers from supporting long-term fiscal reforms, changing the decision-making process may be just as important as changing the policies themselves. A fiscal commission could address this challenge by creating a bipartisan forum that encourages compromise outside the pressures of day-to-day politics while still requiring congressional approval of the final recommendations.

The Fiscal Commission 

A commonly proposed solution to reduce the political gridlock over the nation’s fiscal challenge is to establish a fiscal commission. Fiscal commissions are typically created when lawmakers conclude that the existing legislative process has failed to produce consensus on pressing fiscal issues, creating the need for a structured bipartisan forum to negotiate difficult tradeoffs. They bring together lawmakers from both parties and independent policy experts to develop a bipartisan compromise, often during a specific timeframe. The 1981 National Commission on Social Security Reform (the Greenspan Commission) is considered a success since it helped produce reforms that restored Social Security solvency. 

Lawmakers are now proposing a similar approach. Senators John Curtis (R-UT) and Angus King (I-ME), along with eight cosponsors, have introduced the Fiscal Commission Act. The legislation would establish a commission tasked with recommending policies to stabilize the public debt-to-GDP ratio within 15 years to below 100 percent and improve the solvency of federal trust funds over 75 years. Companion legislation in the House, introduced by Representatives Bill Huizenga (R-MI) and Scott Peters (D-CA), currently has over 40 bipartisan cosponsors, demonstrating cross-partisan and bicameral interest in the problem. 

Critics argue that a commission without an enforcement mechanism to ensure its recommendations are enacted would still depend on the same political dynamics that have failed to produce meaningful fiscal reform. To address this concern, some policy experts have proposed a BRACs-like process, which allowed Congress to vote up or down on a package of military base closures, rather than on each individual decision. As a result, Congress removed the political costs of closing inefficient military bases while still preserving congressional oversight.

A fiscal commission could change the political incentives surrounding fiscal reform. Under the current process, Republicans typically oppose tax increases while Democrats oppose spending cuts. A commission would ease political pressures by allowing Congress to vote on a single, bipartisan fiscal package rather than a series of individually contentious reforms. This increases the likelihood of meaningful deficit reduction by encouraging reform without unbalanced political incentives.

The Political Obstacle: The Failure of Simpson-Bowles 

While commissions are a substantial step toward bipartisan fiscal reform, past efforts have demonstrated the challenges of translating recommendations into law. The most notable example is the 2010 National Commission on Fiscal Responsibility and Reform (Simpson-Bowles Commission), established by executive order under President Obama. Although the Simpson-Bowles Commission produced a comprehensive plan to reduce budget deficits and stabilize the debt, its plan fell three votes short of the 14 of 18 votes needed for formal approval. 

 Proposed Cuts and Savings from Simpson-Bowles (in trillions of dollars) 

Source:  New York Times 

The commission’s recommendations failed because they asked both parties to accept politically difficult compromises. Republican budget hawks, including former Speaker of the House Paul Ryan, claimed it didn’t go far enough in reforming entitlement programs, particularly health care. Democratic members, meanwhile, had problems with the commission’s revenue proposals, arguing the cuts were too extreme for retirees, military personnel, and rural Americans. As a result, neither party was willing to bear the political costs necessary to secure broad support for the commission’s recommendations. 

Obama, despite creating the commission through executive action, distanced himself from the commission’s recommendations. Although a later agreement reached with former Speaker of the House John Boehner included 90 percent of Simpson-Bowles recommendations, the agreement collapsed amid partisan disagreements. Congress instead pursued smaller deficit reduction measures that fell well short of the commission’s recommendations. The Simpson-Bowles Commission illustrates a weakness of traditional fiscal commissions: without a strong implementation mechanism, even bipartisan recommendations can stall during the final stages of the legislative process. That’s where a BRACs-like commission comes in. 

Persistent deficit spending is likely to remain the norm without proper mechanisms to overcome political pressures. A BRACs-like fiscal commission, paired with automatic implementation procedures, could help address the problem by limiting opportunities for partisan opposition to derail a bipartisan agreement. Unlike the Simpson-Bowles Commission, whose recommendations stalled during the final stage of approval, a commission whose recommendations would be subject to an up-or-down congressional vote would make comprehensive fiscal reform more politically feasible. 

Another shortfall of Simpson-Bowles was its lack of public support. Because its recommendations included politically unpopular reforms to taxes and entitlement programs, a robust public education campaign was essential to build support and secure their successful implementation. Without it, lawmakers had little political motivation to support the proposals. 

The case for a commission is stronger today than it was in 2010. When the Simpson-Bowles Commission issued its recommendations, the public debt totaled roughly $9.27 trillion. Its failure isn’t simply the rejection of its recommendations; it paved the fifteen-plus years of continued budget deficits that caused the debt held by the public to rise to $31.99 trillion today. While no commission can eliminate political disagreement, pairing bipartisan recommendations with automatic implementation mechanisms would reduce the political barriers to adopting comprehensive fiscal reforms that improve the nation’s long-term fiscal outlook.

Conclusion 

America’s fiscal challenges are not defined by a lack of policy solutions; they’re defined by a political system that struggles to implement them. Unless Congress adopts a process that better facilitates bipartisan compromise – such as a BRACs-style fiscal commission – the nation’s rising debt will remain less an economic inevitability than the result of political choices.

The failures of the Simpson-Bowles Commission provide valuable lessons for future fiscal commissions. A successful fiscal commission must pair bipartisan recommendations with credible enforcement mechanisms that increase the likelihood that its recommendations are enacted. With debt continuing to rise, interest spending exceeding other expenditures, and major entitlement programs facing solvency challenges, continued congressional inaction is no longer an option. A well-designed fiscal commission offers Congress a mechanism for making the essential improvements for the future success of the American economy.