D.C.’s affordability headache has a silver bullet, new study shows: Tackling $40 trillion national debt would boost household income by $36,000

The cost to the U.S. government of servicing the $40 trillion national debt pile is not difficult to come by: The Treasury publishes its own data on interest payments.

The costs to households and individuals are more difficult to pinpoint, but a new report from the Committee for a Responsible Federal Budget (CRFB) suggests deficit reduction is the key to solving an affordability crisis.

Household costs have become a political lightning rod, both in the run-up to the 2024 presidential elections and again in 2026, ahead of the midterms.

A July study from Pew Research showed the economy was the top-of-mind issue for voters, with 29% saying they wanted to hear plans to address price increases from Congressional candidates.

A further 15% said affordability and the cost of living, specifically, were the key issues for them.

The topic has become a problem for President Donald Trump, who is under pressure to normalize global oil supply chains, which are disrupted due to the U.S.-Iran conflict.

The CRFB suggests there is a solution to the affordability headache in the hands of Congress: addressing the national debt.

Fiscal discipline could aid the interest-rate-setting Federal Reserve in its inflation battle—currently at 3.4%, well above its 2% target, the committee explains.

“When interest rates remain well above the zero lower bound and the economy is performing near its productive capacity, deficit reduction can reduce excess demand and slow price growth,” it writes.

Deficit reduction would also boost supply, the committee argues, as it could reduce the “crowding out” of private investment—an idea sources previously shared with Fortune on Treasury Secretary Scott Bessent’s latest bond plan.

“Deficit reduction can further reduce inflation by lowering self-reinforcing inflation expectations to the extent it reduces the likelihood that future policymakers will aim to inflate away the national debt,” the committee added.

The committee also crunched the numbers on the savings per household if inflation—and hence, interest rates—came down: A 1.5 percentage point rate reduction would save a family $5,800 per year on a $500,000 mortgage and $500 per year on a $50,000 car loan.

The income factor Debt hawks argue the value of U.S. debt isn’t their concern—it’s the country’s debt-to-GDP ratio that is the source of alarm.

A debt-to-GDP ratio shows the balance of how much a country has borrowed versus its growth, and therefore the risk attached to lending funds.