Ray Dalio, Scott Bessent and House members from both sides of the aisle are rallying around a '3% solution' to tame the out of control national debt.

The article focuses on the emerging bipartisan support in the U.S. Congress for legislation aimed at reducing the federal budget deficit to 3% of GDP, a target endorsed by groups like the Bipartisan Fiscal Forum and the Commission for a Responsible Federal Budget. Despite broad agreement on the goal, achieving it poses significant challenges due to rising spending, especially interest on the federal debt, which is projected to become the second-largest budget item by 2036. The article highlights the Budget Enforcement Act’s pay-as-you-go (PAYGO) rules from the late 1990s as a successful precedent for deficit control, while warning that failure to act could lead to the introduction of a national value-added tax (VAT), a measure currently absent in the U.S. The piece also notes that key figures, including Treasury Secretary Scott Bessent, advocate for coordinated fiscal and economic growth targets, but current political leadership has yet to prioritize deficit reduction in policy agendas. [Extracted from the article]