The Debt Dispatch

Photo by Towfiqu barbhuiya on Unsplash The House is expected to vote Tuesday on a continuing resolution (CR) that would fund the federal government through December 11. Speaker Mike Johnson stated the priority is to “make sure this government gets funded and we don’t have another Democratic shutdown.” Avoiding another pointless government shutdown is reasonable.

Social Security is often described as a problem in 2032, when its insolvency will trigger automatic benefit cuts under current law. But the program has already been adding to federal debt for more than a decade. Since 2010, Social Security’s dedicated tax revenues have fallen short of benefit payments, and the federal government has financed the difference through additional borrowing.

Here are this week’s reading links and benefits breakdowns: Outdated SSI Reporting Drives Billions in Overpayments. A new Social Security Advisory Board report from Amy Shuart, Nancy Altman, Jagadeesh Gokhale, and Bob Joondeph finds that outdated reporting infrastructure contributed to Supplemental Security Income (SSI) making $6.3 billion in overpayments in fiscal year 2024.

Photo by Diane Picchiottino on Unsplash Congress is preparing to bail out the federal highway program once again without paying for it. According to a July 9 score by the Congressional Budget Office (CBO), the House Transportation Committee’s BUILD America 250 Act (BUILD) would add more than $147 billion (about $1,100 per household) to the already unsustainable national debt over five years, while violating the user-pays principle.

Photo by Nahrizul Kadri on Unsplash Here are this week’s reading links and fiscal facts: Australia’s superannuation system isn’t the Social Security fix Trump imagines. Samuel Gregg of the American Institute for Economic Research writes in WSJ that President Trump has praised Australia’s private pension model.

Yesterday’s report by the Treasury shows that better pre-payment screening through the Do Not Pay (DNP) System can save taxpayers billions of dollars every year. DNP is a data-sharing tool agencies use to cross-check applications against federal databases and flag improper payments before the money goes out the door.

ūüďĘ Join Cato tomorrow, July 21, for A Framework for Lasting Affordability. From 2:30‚Äď3:15 PM ET in-person and online, Cato‚Äôs Ryan Bourne sits down with Problem Solvers Caucus Co-Chairs Reps. Brian Fitzpatrick (R‚ÄĎPA) and Tom Suozzi (D‚ÄĎNY) to dig into the caucus‚Äôs bipartisan Affordability Agenda. The Caucus should look for inspiration from Cato‚Äôs Handbook on Affordability to expand economic freedom, remove unnecessary regulatory barriers, and increase competition.

Photo by Suzi Kim on Unsplash Republicans have one remaining reconciliation bill before the midterms. They should use it to prove they’re serious about reining in excess federal spending and fixing the debt, rather than embracing a “go small and go home to campaign” approach (as coined by the Wall Street Journal Editorial Board).

Here are this week’s reading links and benefits breakdowns: Cato Scholars Highlight Proposed OMB Rule to Improve Federal Payment Screening. The Office of Management and Budget proposed a rule that would expand the use of the Treasury’s Do Not Pay (DNP) system. As the Debt Dispatch has previously covered, DNP is a data-matching tool that cross-checks applicant eligibility against federal databases before funds are disbursed.

Photo by Tim Mossholder on Unsplash Congress is weighing Reconciliation 3.0, a fast-track mechanism to enact spending and tax legislation with only a simple majority. House Budget Committee Chair Jodey Arrington(R-TX) said it would center on defense spending, cutting fraud, and making housing and healthcare more affordable. Congress should offset any new spending in reconciliation and focus on reducing the deficit on a path toward a 3 percent target.