Billionaire investor Ray Dalio is endorsing a bipartisan effort in Congress to cap the federal budget deficit at 3% of gross domestic product, calling it a necessary step to avoid a long-term debt crisis.
In a new post on X, the founder of Bridgewater Associates points to legislation introduced by Representatives Bill Huizenga and Scott Peters that would reduce and maintain the federal deficit at or below 3% of GDP.
He says the proposal is one of the few areas where lawmakers across party lines appear aligned.
“I love and endorse the bipartisan 3% of GDP Budget Deficit Solution. In the House of Representatives, there is now a bipartisan bill in the works to enact, and a growing agreement that we need a 3% cap on the budget deficit.
While most responsible members of both parties don’t agree on much, they agree on this, which is also urged by the Committee for a Responsible Federal Budget and almost all knowledgeable investors, economists, and business leaders beyond them.”
He adds that Treasury Secretary Scott Bessent has publicly urged President Trump to pursue the same benchmark.
“Treasury Secretary Bessent has long been a supporter of this path, publicly saying, ‘I would urge [President Trump] to make public his desire to get the deficit down to 3% by the end of his term.’”
But Dalio notes that political resistance to raising taxes or cutting benefits remains the main obstacle.
“All leaders from both parties I spoke with in private agree. 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.”
According to Dalio, formalizing a 3% ceiling would create a measurable benchmark for fiscal discipline.
“A stated 3% GDP ceiling goal would become a benchmark for accountability across administrations, providing both a rule and a report card. With it in mind, each year we would naturally ask, ‘Is the nation moving toward or away from sustainability?’ That stated goal and progress toward fiscal responsibility would strengthen markets, bolster investor confidence, and reduce the risks of the US experiencing a sovereign debt/currency crisis.”
His endorsement comes as the Congressional Budget Office (CBO) projects deficits remaining well above that threshold in the coming decade.
The CBO estimates the federal deficit will total $1.9 trillion in fiscal year 2026 and grow to $3.1 trillion by 2036. As a share of the economy, the shortfall is projected at 5.8% of GDP in 2026 and 6.7% in 2036, compared with a 50-year average of 3.8% of GDP.
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