US Debt Levels Could Prompt Fiscal Crisis: CBO Director

Senators used the warnings to discuss immigration reform and the potential to add to labor growth with merit-based immigration programs that are seen fueling productivity.

Senators suggested cutting benefit programs because raising taxes across the board still would not cover the deficit.

Sen. Mike Braun, R-Ind., suggested the answer could be big spending cuts. “We have a spending problem. … You can’t tax your way out of this. It is more about backbone and fortitude,” Braun said.

CBO’s Hall shot down one lawmaker’s trial balloon suggestion to have the government print more money. He characterized it as untenable, possibly leading to higher inflation, lower wages and a greater likelihood of a financial crisis.

The afternoon hearing ended with senators requesting projections on how immigrants allowed into the U.S. based on merit, not families, can help grow the economy by adding to productivity and the workforce, while acknowledging the slowdown in housing.

There were no outright calls from senators for new laws, which Hall stressed would be necessary to change the course of the debt’s impact on the future.

To start righting the deficit’s course, “lawmakers will have to make significant changes to tax and spending policies — making revenues larger than they would be under current law, making spending for large benefit programs smaller than it would be under current law, or adopting some combination of those approaches,” Hall testified.