Record U.S. debt is politically ‘solvable challenge,’ new report says

A coalition of think tanks has proposed a bipartisan plan to pay off the colossal U.S. federal debt.

The Peter G. Peterson Foundation has released a set of policy proposals from seven think tanks across the political spectrum on how to tackle America’s nearly $35 trillion debt.

Each of the think tanks proposed plans to significantly reduce the nation's debt burden over the next three decades. But here's the kicker: they all agreed that a mix of spending cuts and revenue increases is necessary.

That's quite the admission.

Republicans and Democrats have differing ideas on those two approaches (if they even talk about them at all). The bipartisan consensus in this report suggests a way forward that both political parties might accept.

Michael A. Peterson, chief executive of the foundation, expressed optimism about the findings. "It gives me hope to see a couple hundred different policy proposals that could solve this. This is a solvable challenge for the United States,” he said.

Think tanks propose changes to Social Security, Medicare, and taxes

The report highlights several areas where the think tanks agree on ways to address the national debt.

Social Security is a major focus. Most proposals suggest increasing the amount of income that can be taxed for Social Security and raising the age when people can start receiving full benefits.

While creating a basic minimum benefit might cost $35 to $50 billion, these other changes could save a lot of money. Just raising the full retirement age, starting from January 2024, could save $121 billion.

The think tanks also agree that Medicare needs to be changed.

About half of them suggest consolidating hospital coverage, outpatient services, and prescription drug benefits into a single plan. This would streamline administration and reduce redundancies, potentially saving over $122 billion without reducing the quality of care.

When it comes to taxes, the think tanks generally agree that the 2017 tax law needs to be revisited before it expires in 2025.

Many suggest keeping lower tax rates for people with lower incomes, but increasing the rate for those with the highest incomes from 37% to 39.6%. This change alone could bring in $187 billion.

One of the biggest money-saving ideas is to end personal tax exemptions, which could add $1.717 trillion to government funds over ten years.

Is this a bipartisan path to tackling the debt?

The Washington Post has weighed in on the report as the presidential election campaigns ramp up with few mentions of the national debt. In an editorial, the Post's board expressed support for the study's findings.

"Politics is the main obstacle to getting this done," the Post's editorial reads. "But the Peterson report shows where Congress and the next president could realistically begin."

The lack of substantive discussion on how to tackle debt isn't unique to American politics.

The U.K.'s Institute for Fiscal Studies points to a troubling "conspiracy of silence" among political leaders worldwide on the issue of mounting government debt, which has reached a staggering $91 trillion globally.