One option is for Congress to agree to a cap on federal spending as a share of gross domestic product or to set a target for holding the public debt below a certain share of GDP. President Obama's bipartisan fiscal commission, for example, outlined a long-term plan to cut federal spending below 22 percent of GDP by 2013 and debt to 60 percent of GDP by 2023. Spending totaled 24 percent of GDP last year, and the public debt now stands at 64 percent of GDP.
That approach would be similar to what some other countries do, linking debt-limit decisions to their budget planning, notes a new report by Congress's nonpartisan Government Accountability Office (GAO).
Some in Congress would like to link a debt-limit decision to a deal on tax reform, Social Security reform, or perhaps even a balanced-budget amendment to the Constitution. But none of those initiatives is easy to put on a fast track.
