With the fiscal debt clock ticking, the Committee for a Responsible Federal Budget yesterday brought together members of Congress and other fiscal experts to talk about "Let's Get Specific: Ways to Fix the Federal Budget". Facing a soaring federal debt, it's difficult to discuss how to close the fiscal gap without getting specific, CRFB Co-Chairman Bill Frenzel told those attending the half-day session. (CRFB also provided a live twitter feed to the event, which you can review on our Twitter page!)
CRFB challenged top present and former lawmakers and policy wonks to come up with specific solutions to our nation’s fiscal challenges. Conference participants included:
- Senator Ron Wyden (D-OR)
- Congressman Paul Ryan (R-WI)
- Congressman Jim Himes (D-CT)
- Bill Frenzel, Co-Chair, CRFB and Former Ranking Member, House Budget Committee
- Martin Feldstein, Harvard University, Former Chair of the President's Council of Economic Advisers
- Chuck Bowsher, Former Comptroller General of the U.S. General Accounting Office
- Jim Kolbe, Fellow, German Marshall Fund, former U.S. Congressman
- Maya MacGuineas, President, CRFB
- Bill Galston, Senior Fellow, Brookings Institution
- Buck Chapoton, Strategic Adviser, Brown Advisory
- Bill Gale, Senior Fellow, Brookings Institution
- Larry Korb, Senior Fellow, Center for American Progress
- Robert Carroll, Ernst & Young LLP
Panelists offered specific plans in key areas: including, on the tax side, base broadening featuring tax expenditure reform (which can be done in several ways), Senator Wyden on the Wyden-Gregg proposal, Congressman Ryan on his the Roadmap for America; Congressman Himes on the importance of education and fiscal negotiation based on principles in a framework of shared sacrifice; the reduction of defense spending; the tackling of our entitlement challenges; and changes in health care policies.
Outlining his proposals for cutting the defense budget, Lawrence J. Korb, a senior fellow at the Center for American Progress, said the wars in Iraq and Afghanistan mark the first conflict the U.S. has engaged in without a tax increase. He said significant savings may be found through such ideas as a decrease in overall troops, particularly in Europe. Korb and Laura Conley recently outlined proposals that would save just over $109 billion from the Pentagon's budget in 2015.
At the conference, CRFB released the first two papers in a new series called "Let's Get Specific." For its health care plan, CRFB outlined a proposal to save $550 billion in health care costs during the next decade by limiting the tax exclusion on employer-paid health insurance, increased cost sharing, and other areas. CRFB also released a Social Security plan that would save $150 billion over 10 years through program changes, including a more accurate measure of inflation for cost-of-living adjustments. CRFB President Maya MacGuineas and Bill Galston of the Brookings Institution presented their own fiscal plan, identifying $1.1 trillion in savings in the year 2020 to stabilize the debt-to-GDP ratio at 60 percent.
During the tax panel, almost all speakers mentioned the need for fundamental tax reform, with base broadening being the crucial element. The tax code is permeated by roughly two hundred special tax credits, deductions, and exemptions--the collection of which are called tax expenditures. Speakers noted that if you want fairness in fiscal reform and a sense of burden sharing, start with tax base broadening by beginning to limit some of these special credits and deductions. Martin Feldstein noted that limiting tax expenditures to 5 or 3 percent of a person's adjusted gross income (AGI) could save $85 and $160 billion per year, respectively. Bill Gale also argued that tax reform could be structured in such a way that both increased revenues and improved economic growth, taking aim at tax expenditures, energy taxes, and a consumption tax.
Another major theme was that both sides of the aisle must work together in solving these problems sooner rather than later. "The long run is now," said Maya MacGuineas. But no solutions would be possible without bipartisan support. But to do this, policymakers, think tanks, and the public alike must support a spirit of cooperation--putting the best interests of the country forward. Congressman Jim Himes (D-CT) offered kind words on Congressman Paul Ryan's (R-WI) "Roadmap for America's Future," a comprehensive debt reduction plan. Highlights of Ryan's plan can be found here. While he noted that he may not agree with all the elements, he greatly respected the courage it took to present such a plan. Several speakers noted how there must be a "cease-fire" in partisan attacks for those who are working hard to find solutions.
Finally, it was noted that good ideas, compromises, and solutions should not be rejected on grounds that they are not perfect. Everyone will have to come to compromises, accepting changes to one program in exchange for changes in other areas. And there must be a dedication to hold policymakers accountable to the facts to forge progress on these vitally important issues.
Videos from the event will be posted soon.