Debt and Deficits: Fiscal Challenges Facing the Next Administration with Bob Bixby and Mike Murphy

On January 10, 2024, The Rockefeller Center hosted Bob Bixby, Executive Director of The Concord Coalition, and Mike Murphy, Senior VP and Chief of Staff for the Committee for a Responsible Federal Budget to discuss upcoming fiscal challenges for the United States. The event was moderated by Economics Professor Majorie Rose.

Rose began the event by showing the audience gathered in the Rockefeller Center's Hinman Forum a video of Dartmouth students answering the question "what do you think about the fiscal deficit?" Most students were unable to answer how large the deficit is and were otherwise unconcerned about the issue.

Following the video, Bixby and Murphy each delivered presentations on the rising fiscal deficit. Bixby presented graphs that showed the widening gap between federal spending and revenue as well as the growth of automatic programs over the past few years.

Bixby's first point was about the composition of the 2023 federal budget, which ran a deficit of $2.03 billion.

"The deficit was about 6% of GDP," Bixby said. "Over the past 50 years, that deficit has averaged about 3.5%. We are way off the beaten track."

He went on to project yearly deficits for three decades. In 2053, his graph showed that the deficit would make up 10% of gross domestic product.

Bixby pointed out that another issue is constraints on potential GDP growth. He said that America cannot expect a "buoyant" economy unless measures are taken to "improve the growth of the workforce or really boost productivity." According to Bixby, the CBO has projected that by 2052 there will be more deaths than births which will contribute to a declining labor force.

Bixby concluded by demonstrating that Social Security and Medicare trust funds both will be insolvent in roughly ten years, which will force a "20% cut across the board." His accompanying slideshow added that beneficiaries of Social Security will receive just 75 percent of scheduled benefits. Bixby emphasized that questions about trust fund solvency and spending control must be raised to candidates for the 2024 presidential election.

Murphy kept the conversation around the 2024 election. His slideshow was titled "Principles of a Fiscally Responsible Campaign" and included six different ways to approach fiscal issues. His advice included being honest about America's fiscal problems, making deficit reduction a top priority, keeping solutions on the table, addressing the insolvency of trust funds, planning for the Congressional debate over the 2025 debt limit, and avoiding "budget myths." These myths include the idea that America can borrow without consequence and deficit reduction will harm the economy, among others.

Specifically, Murphy addressed the nonpartisan claim that Social Security should not be touched, which both President Biden and former President Trump have said. He also emphasized that the debate over the debt limit does not have to be negative.

"There have been several instances when you've attached things to increasing the debt limit that have made the fiscal situation better," Murphy said.

In the moderated Q&A, Bixby and Murphy addressed why people do not seem to care about fiscal issues.

"It's not in your face," Bixby said. "People understand the importance of acting now to protect the long-term effect of climate change. You have wildfires and smoke from Canada and polar ice caps which you can identify and show the specific effect. It's difficult to show the specific effect of deficits."

Murphy agreed that the issue is "abstract" and hard to fully understand on a macroeconomic level. He added that because the solution is "taking something away," selling it is "a hard message politically."

Former Sen. Rob Portman '78 (R-OH) was also in attendance at the event.

By Varun Swaminathan '26, Rockefeller Center Student Assistant for Public Programs