Congress is reportedly weighing whether to use reconciliation—a special budget process that allows certain legislative changes to be enacted with a simple majority vote in the Senate—to provide $200 billion for the war in Iran, plus additional money for immigration enforcement. Neither issue merits new spending. But if legislators nevertheless choose to use reconciliation, they must make the package fiscally responsible.

Ideally, Congress should aim to reduce deficits to 3 percent of GDP or lower, a commonsense target to achieve debt sustainability. Short of that, Congress should, at a minimum, achieve $600 billion in net deficit reduction. That’s the amount the final 2025 reconciliation bill exceeded the House-passed maximum allowable non-interest borrowing. Anything less falls short of the bare minimum amid a mounting fiscal crisis.

A $600 Billion Deficit Reduction Target Should Be the Bare Minimum

The federal government routinely runs annual deficits of $2 trillion. Publicly held federal debt is projected to exceed the nation’s entire annual economic output this year. By 2030, debt is projected to surpass the World War II debt-to-GDP record high. By 2056, the debt will reach 175 percent of GDP, even under optimistic projections with no new wars, pandemics, or economic recessions.



The main culprits of America’s persistent and growing deficits are old-age entitlement programs, chiefly Medicare and Social Security. These two programs, along with interest costs and other mandatory spending programs, dominate the federal budget, growing on autopilot without regular congressional approval or review. Absent reform, entitlements and interest costs will consume all federal revenue by 2036.



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