(The Center Square) – Bridgewater founder Ray Dalio on Thursday backed a bipartisan proposal to cap annual deficits at 3% of gross domestic product, a resolution that would allow Congress to continue to spend more taxpayer money than it collects for years to come.
House Resolution 981 would limit yearly deficits to 3% of GDP by 2030 or sooner. GDP measures the nation’s total economic activity. Last year’s budget deficit was about double that at 6% of GDP.
The measure sets a target of reducing the deficit to 3% of GDP or less. After reaching that goal, Congress will then aim for a balanced budget. Congress has not achieved this in more than two decades.
Dalio urged Congress to adopt the measure.
“While most responsible members of both parties don’t agree on much, they agree on this,” he said in a social media post. “… All leaders from both parties I spoke with in private agree.”
Treasury Secretary Scott Bessent has said he’d asked President Donald Trump to support the proposal.
However, Dalio said the challenge would be sticking to the plan when it gets difficult.
“The only impediment is their fear of the political consequences of being in favor of raising taxes and cutting benefits if that is required to reach the 3% GDP budget deficit,” Dalio wrote. “Passing this bill would be a step toward overcoming that objection as it would help legislators argue for fiscal responsibility.”
He said the measure would provide “both a rule and a report card” that “strengthens markets, bolsters investor confidence, and reduce the risks of the U.S. experiencing a sovereign debt/currency crisis.”
House Resolution 981 directs the House Budget Committee to recommend enforcement options within 180 days. These options include procedures for when the target is unmet. The Rules Committee must suggest rule changes to help meet the target. These changes may make budget rules harder to waive and require the Congressional Budget Office to analyze major bills. The resolution also urges Congress to avoid budget gimmicks.
The last budget surplus was in 2001. Since then, spending has outpaced revenues, and annual deficits grew sharply during the COVID-19 pandemic. The fiscal year 2025 deficit was $1.7 trillion, or about 6% of GDP.
Congress last passed a budget below the 3% target in 2015, according to the resolution.
Bipartisan Fiscal Forum Co-Chairs Bill Huizenga, R-Mich., and Scott Peters, D-Calif., introduced the resolution last month.
Congress has yet to take up the measure.
The growing national debt, which is nearing $39 trillion, is largely the result of Congress spending more money than it collects, along with rising costs for Medicare and Social Security as the U.S. population ages and healthcare costs continue to increase.