Record High National Debt Prompts CRFB To Outline Emergency Plan

As much as we’d like to report forward motion in these progress updates, when it comes to the national debt, we can only report that the debt continues to pile up with no end in sight, making the country more vulnerable to economic shocks. Fortunately, the Committee for a Responsible Federal Budget (CRFB), one of the most respected groups in Washington advocating for fiscal prudence, is thinking ahead while our elected representatives continue to play at power politics.

The organization’s president, Maya MacGuineas, told me in 2021 that she believes one should always have a Plan B available just in case circumstances don’t work out. Faced with a debt that has increased $10 trillion (about 35%) since that interview and a Congress unwilling to heed the risks it poses, the CRFB in March outlined a plan to rescue the country should it face an economic shock while we are in this fiscally weakened position. The plan is intended to reassure global markets, particularly our creditors, and, at the same time, provide financial support to Americans here at home.

Just how weakened is the country?

With the national debt soaring to a new record high, currently hovering just below or above $39 trillion (depending on the source), the Peter G. Peterson Foundation, another staunch advocate for fiscal responsibility, reported that, in 2025, interest payments on the debt totaled $970 billion, or almost $80 billion more than the defense budget. At that level, it is the third largest component of the federal budget behind Social Security and Medicare outlays. But maybe not for long: President Trump started a costly war in Iran after the Supreme Court struck down his tariffs — his major revenue-producing initiative — and has recently proposed a budget that would increase defense spending to $1.5 trillion.

At existing revenue and spending levels, the Congressional Budget Office expects interest payments to top $1 trillion this year. An analysis by the Peterson Foundation projects that they will surpass Medicare spending in 2028. That’s a lot of taxpayer money going out the door to pay for our elected representatives’ — of both parties — inability to manage the federal budget. Those currently in charge of the government with the most power to make change — President Trump, House Speaker Mike Johnson (R-LA), and Senate Majority Leader John Thune (R-SD) — don’t seem to be trying very hard. They refuse to negotiate with their opposition or even consider raising taxes to cover government expenses while they have been more than willing to cut programs. In fact, Trump’s signature legislation of 2025, the One Big Beautiful Bill Act, extended his tax cuts of 2017 indefinitely and also substantially reduced funding for the Supplemental Nutrition Assistance Program, commonly known as SNAP.

This is where CRFB’s “Break Glass Plan” (as in “Break Glass in Case of Emergency”) might one day provide much-needed critical guidance — if the party in power is willing to collaborate:

1. Address the immediate economic shock. CRFB notes that such a shock could be produced by a wide range of circumstances, such as another epidemic, recession, or war, so the response should be tailored specifically to address its nature and scope. The plan discusses several potential scenarios and suggests the types of responses that might be warranted.
2. Two-for-one budget offsets. Using what it calls “Super Paygo”, CRFB recommends Congress agree to a longer-term package that couples $2 in spending cuts and new revenue over 10 years for every $1 borrowed to facilitate an economic recovery. The organization offers several examples where savings could be found, including establishing site-neutral payments for Medicare — paying the same fee for a service regardless of the type of facility, e.g. hospital or doctor’s office, where it is performed. CRFB estimates such a change could save about $210 billion.
3. Lock in an interim deficit reduction mechanism. CRFB views the next economic crisis as an opportunity for lawmakers to slow or stop growth of the debt by reducing or eliminating the annual budget deficits that contribute to it. The group proposes creation of a default deficit reduction mechanism that would go into effect automatically once the economy has recovered. Such a mechanism would have pain points on both the spending and revenue side of the ledger, including an across-the-board cap on discretionary spending and a “deficit reduction surtax” on the wealthy and corporations. Such pain points are intended to incentivize Congress to act on a longer term plan to regain control of the federal budget.
4. Establish a bipartisan fiscal commission and commit to voting on its recommendations. The commission’s mission would be to replace the interim deficit reduction mechanism with a tax and spending plan that would ensure the continued viability of the Social Security and Medicare trusts and put federal revenue and spending on track to reduce the nation’s debt to a more sustainable level.Note CFRB’s commitment to securing the major trust funds. The group has long warned of the impending insolvency of the Social Security and Medicare trust funds. While members of both parties have failed to negotiate a solution, it is currently this Republican-led Congress and this President who are ignoring the group’s warnings.

As an established bipartisan voice in Washington focused solely on the nation’s fiscal well-being, CRFB is accustomed to being heard by lawmakers. Whether they listen, however, is not within the organization’s control. Though the debt barely registers with voters, our elected leaders need to recognize that this problem presents an opportunity for them to lead.

Unfortunately, while CRFB might expect members of both parties to embrace their guidance during an economic crisis, it is unlikely that the Republicans in power today would follow through on steps 3 and 4 of the “break glass” plan. Given their past refusal to raise taxes and instead, their unwavering advocacy for lower taxes, it is reasonable to assume they would reject a surtax on the wealthy in the near-term and higher taxes over the long run.

As voters consider who to vote for in the midterms this fall, they might look to the candidates who are prepared to work across the aisle to finally address the national debt, a problem that fiscal conservatives and pragmatic progressives have been warning about for decades. That is the best chance the nation has to rein in the debt and still preserve the essential government services that so many millions of people rely on.

The best Plan B is one that doesn’t have to be used. The next best is one that our leaders are prepared to execute.