New York Times | January 14, 2013
The elbow room the government has given itself on the debt ceiling is quickly approaching, and there are a numbers of ways to deal with it. But only one would be both fiscally and economically responsible.
We can run out the extraordinary measures keeping the nation's credit card working, and once again threaten to default if policy makers can't agree to lift the ceiling to cover the bills we have already racked up. The mere threat is likely to create enough economic uncertainty to do real harm, and actually defaulting would be catastrophic.
Skip the gimmicks and reach an agreement for a long-term solution to the nation's growing debt.
We could use various money-minting gimmicks or legal maneuvers to avoid the ceiling, while avoiding the reality that the ceiling is a reminder that we are borrowing way too much. Rather than heeding all the warning signs, Congress and the president would prefer to find new and creative ways to kick the can down the road. At some point, this punting will cause tremendous damage.
Or, we could own up to the fact that we have to make changes to get our nation's finances under control.
Congress should lift the debt ceiling as quickly as possible - no more 11th hour nail-biters please! -- while putting in place a comprehensive plan to bring the debt back down to manageable level.
The focus of the plan should be reforming the nation's entitlement programs that their own trustees have declared to be unsustainable. The changes should be gradual and protect those who depend on them, but align our promises with our ability to pay. Other parts of the budget from outdated programs (for instance, farm subsidies) to defense should be cut, and there needs to be a major overhaul of the outdated and anti-competitive tax code.
Even with such an agreement, raising the debt ceiling will be necessary as our borrowing will continue for the foreseeable future. In fact we want to make sure we don't cut the deficit too much or too fast while the economy is still weak.
But the responsible way to do so is along with a plan to get the borrowing under control. Any of the other options will come with a serious economic price.
New York Times | November 30, 2012
Washington faces two urgent fiscal challenges in the next few months. Before the end of the year, the lame duck Congress, the most polarized in recent history, must negotiate an agreement with President Obama to protect the still fragile economic recovery from the so-called fiscal cliff — the $600 billion in spending cuts and tax increases scheduled to begin to take effect on Jan. 1. Then, early next year, a newly elected but still divided Congress must approve an increase in the federal debt limit. Failure to do so in a timely way would damage confidence, posing yet another threat to the economy’s continued healing.
These two challenges are manifestations of the long-running fiscal challenge confronting the country: the fact that the federal debt is rising at an unsustainable rate. That’s why a political deal to address the fiscal cliff and the debt limit in the near term should be linked to a credible framework to put fiscal policy on a sustainable path in the long term.
By the end of this year, policy makers need to “go fast” to address the fiscal cliff and debt limit and to “go big” to establish the broad outlines of a significant multiyear deficit-reduction plan.
The economy continues to operate far below its capacity. The unemployment rate is at least two percentage points higher than what most economists consider consistent with a full recovery. Other measures, such as the high rate of long-term unemployment and the low labor-force participation rate, reflect an impaired labor market
According to the Congressional Budget Office, gross domestic product is still about 6 percent, or about $973 billion, below the potential level the economy is capable of producing at full capacity. This is the largest gap between actual and potential output following a recession in modern American history.
The weakness of government spending at the state and local level and more recently at the federal level has been a significant factor behind the slow recovery. The phasing out of earlier federal stimulus measures, the expiration of temporary payroll-tax relief and extended unemployment benefits scheduled at the end of the year, and the tight caps on discretionary federal spending already in force mean more federal fiscal drag on the economy’s growth next year even if the fiscal cliff is averted
Ideally, given the shortfall in aggregate demand that is keeping the economy stuck below potential, a deal on the cliff should include an extension of both payroll tax relief and unemployment benefits, as well as other temporary policies to support job creation, such as the employment tax credit for small business and the increase in infrastructure spending proposed last year by President Obama as part of the American Jobs Act.
Alas, it seems unlikely that a deal will contain these measures. At best, if a deal is reached it will probably be limited to tabling the deep spending cuts automatically scheduled to take effect early next year, extending the 2001-3 tax cuts for the bottom 98 percent of taxpayers and raising taxes on the top 2 percent of taxpayers, especially those with incomes over $1 million, through some combination of higher marginal tax rates and caps on deductions.
To improve the economy’s near-term growth prospects, the deal should also contain a promise that Congress will approve the debt limit when necessary without a destabilizing delay.
So far, negotiations about a go-big framework for deficit reduction have focused on cutting at least $4 trillion from the federal budget over the next decade, with the goal of stabilizing and then reducing the debt-to-G.D.P. ratio. The election and recent Gallup polls settled the debate about whether an increase in revenues will be part of the plan. The answer is yes.
The debate has shifted to how revenues should be increased and who should bear the burden. The proposition that revenues should be raised through tax changes that limit deductions, credits and loopholes, in lieu of or in addition to rate increases, is gaining momentum.
Economists believe that raising revenues for deficit reduction through base-broadening tax reforms is probably better for economic growth than raising marginal tax rates.
Although it may prove politically necessary for a bipartisan deal, however, there is no convincing economic justification for using some of the revenues saved from tax reforms to lower marginal income tax rates for high-income taxpayers. These rates are already at historic lows.
And there is no convincing evidence that real economic activity responds materially to changes in these rates, at least within the range of rates experienced in the United States during the last half-century. The tax code should be reformed to make it simpler, fairer and less distortionary and to raise revenues for deficit reduction, not to reduce tax rates on high-income taxpayers.
Over the last 30 years, income inequality in the United States has increased sharply. During the same period, the federal tax system has become less progressive and has contributed to the trend of rising income inequality and widening opportunity gaps between children born into different income groups.
A more progressive tax code, achieved through some combination of higher tax rates and capping deductions for high-income taxpayers, would be a powerful tool both to counteract these trends and to achieve long-term fiscal sustainability.
On the spending side, “go big” bipartisan proposals for deficit reduction, such as the Simpson-Bowles and Domenici-Rivlin plans, focus on curbing the growth of Medicare, Medicaid and Social Security. This is understandable as these programs already account for about 40 percent of federal spending and that share is projected to rise as a result of the aging of the population and the growth of health care costs.
But lumping Medicare, Medicaid and Social Security together is misleading and, given strong partisan passions on Social Security, could weaken the chances of reaching a bipartisan deal on deficit reduction.
Spending on Social Security is rising primarily because of demographics, not because of growing benefits per eligible person. Indeed, the Social Security Trust Fund has adequate resources to cover benefits until at least 2033, and the program’s revenue shortfall is less than 1 percent of G.D.P. over the next 75 years.
In contrast, the argument for including Medicare and Medicaid in a framework for long-run deficit containment is compelling. The single most important factor behind the projected growth in federal spending is the growth in health care spending, driven primarily by the growth in Medicare spending per beneficiary.
The outlook has already improved as a result of significant changes in the delivery and payment of health care services in the Affordable Care Act. As a result of these changes, growth in Medicare spending per enrollee is projected to slow to 3.1 percent a year during the next decade, about the same as the annual growth of nominal G.D.P. per capita and about two percentage points slower than the annual growth of private insurance premiums per beneficiary.
Speeding up the pace of the Affordable Care Act changes along with others, such as reducing subsidies for high-income beneficiaries and drug benefits and introducing small co-pays on home health-care services, would mean even larger Medicare savings.
A “structural reform” popular among Republican deficit hawks like Representative Paul Ryan of Wisconsin to convert Medicare to a premium-support or voucher system would be counterproductive and would drive up both spending per beneficiary and overall costs in the health care system.
The goal of a “go big” plan for deficit reduction should be to ensure the economy’s long-term growth and competitiveness. Yet the debate over spending in Washington is fixated on cutting entitlement spending. Very little is heard about the need to increase federal spending in education and training, research and development and infrastructure, three areas with proven track records in rate of return, job creation, opportunity and growth.
Spending in these areas accounts for less than 10 percent of the federal budget; this share has been declining for several decades and is slated to fall to dangerous new lows as a result of the caps on nonmilitary discretionary spending already in place.
A pro-growth framework for deficit reduction must reverse these trends. More government investment in the foundations of economic growth should be recognized as a core principle of deficit reduction.
The Hill | November 14, 2012
The election is over, the ballots have been counted and the TV commercials approved by the various candidates are, thankfully, off the air. But there is no time for President Obama and Congress to rest on their laurels. Policymakers need to return to the task of legislating, and nothing is more pressing than putting in place a plan to fix this country’s debt and avoid the year-end “fiscal cliff.”
Lost in the quadrennial tumult of campaign ads and horse-race coverage was any serious discussion of a plan to resolve the upcoming fiscal cliff — that ham-fisted combination of across-the-board spending reductions and tax increases of more than $500 billion next year alone — and, beyond that, the nation’s unsustainable debt. In the immediate future we face the prospect of hurdling into a self-imposed recession, and over the longer term, a fiscal crisis due to our own failure to act. No lawmaker should find either scenario acceptable. Our country is better than that.
With less than two months to go before we reach that cliff, the lame-duck session of Congress will be profoundly consequential. Though going over the cliff would indeed reduce the deficit — something we need to do — it would in fact be too much deficit reduction too quickly, and focus on the wrong parts of the budget. Though I realize that, given our nation’s recent track record of burying our head in the sand on the need to deal with the deficit, it seems a bit silly to worry about too much deficit reduction, this is a tricky balancing act. Ripping the wrong bandage off now and hurtling ourselves into a recession would ultimately make bringing the deficit down much harder.
There’s a big difference between implementing deficit reduction all at once and enacting a gradual plan upfront. A smart deficit-reduction plan should be implemented within the next several months, but be phased in gradually in order to protect the recovery and allow people and businesses time to prepare for changes. And, importantly, it would focus on the major problem areas of the budget, including healthcare and retirement programs, as well as comprehensive, pro-growth tax reform that broadens the base, lowers rates and raises revenues in order to help reduce the deficit.
As we stand on the edge of a fiscal cliff, however, we are also on the precipice of an amazing opportunity. The actions that must be taken to avoid the cliff could prove to be the push our political leaders need to make necessary larger, longer-term changes. Indeed, Moody’s Investors Service months ago declared that if Congress simply waives away the cliff, without making progress on long-term deficit reduction, we could face another downgrade. And without a deal, annual trillion-dollar interest payments will become a reality within the next decade, or sooner, and our publicly held debt will be twice of the size of the economy within 25 years.
With the consequences of inaction so clear and so dire, the moment for a long-term, comprehensive and bipartisan agreement to stabilize our national debt is now.
So what would a comprehensive reform look like? We should cut all wasteful and low-priority spending — but by no means is that the answer alone. We need to control the exploding costs of federal healthcare and retirement programs, reforming them to ensure our entitlement programs are strong for the next generation and protected for those who need them most. We also need to reform the tax code, which hasn’t had a thorough look-over since the 1980s. Given what a mess the tax code is, we in fact have the opportunity to make changes that would simplify the code, make us more competitive and help grow the economy through lower rates, while at the same time raising needed revenues to reduce the deficit — an opportunity that we should not miss.
The lame duck is the opportunity to start this process while avoiding the cliff. In order to extend some or all of the dangerous cliff policies, lawmakers need to put in place the process to secure a larger deal. This will have to be built on compromise. This means that neither party can hold on to its “sacred cows,” and favored constituencies will be offended. Those away from Capitol Hill have already been helping to create the political environment to make such compromise possible by signing the Citizen’s Petition at FixTheDebt.org, letting lawmakers know that it’s this kind of compromise they definitely do want.
Americans want a comprehensive agreement over the national debt. So do businesses, credit-rating agencies and the economy as a whole. It’s time for the president and Congress to shift from campaign mode into work mode and get this done, for the good of the country.
Washington Post | November 8, 2012
The American people spoke on Tuesday, and they voted for a continuation of divided government. With President Obama at the helm for four more years and a strengthened Democratic majority in the Senate, and with the Republicans decidedly in control of the House of Representatives, both sides may now feel emboldened to pursue their party’s preferences. Rarely has it ever been this clear, however, that elected leaders from across the political spectrum need to come together to address our nation’s rising federal debt.
Unlike previous times, when there may have been many months or even years for officials to continue fighting long-standing policy battles, important decisions need to be made in the next two months to address the “fiscal cliff.” In a way we have never seen before, both sides will have to move beyond contentious electoral politics and come together in the spirit of good governance to replace the abrupt and mindless spending cuts and tax increases set to take effect Jan. 1 with a gradual and intelligent deficit reduction plan.
Though there seems to be broad agreement that we should replace the fiscal cliff with something better, many partisans on both sides seem to think they have the upper hand in the negotiation. Democrats see the threat of large defense cuts and massive tax increases as a way to force tax increases for the rich. Republicans see large domestic spending cuts, tax increases on poor and middle-income Americans and the need to increase the debt ceiling as their own leverage points.
There has even been talk of going over the fiscal cliff to potentially strengthen each side’s bargaining position. Going over the cliff, though, would mean betting the country on the hope that the other side will back down before it is too late. That’s a bet we shouldn’t take. The risk is simply too high.
Going over the fiscal cliff would mean allowing a massive and immediate cut to nearly every major government agency and activity, including those vital to our national security or economic growth. It would mean a large and immediate tax increase on nearly all Americans, not just the highest earners. It would mean a double-dip recession at a time when the economy is still very weak and many Americans are struggling to find work.
But simply punting on the fiscal cliff and continuing to add to the debt would be an even bigger mistake. It would show markets we cannot put our financial house in order. Instead of using this moment as leverage to score political points, our elected leaders should seize the opportunity to finally address the long-term imbalance between government spending and revenue, and to prevent a future debt-induced economic crisis.
What does that alternative look like? We already have the blueprints.
It’s the type of bipartisan package toward which the fiscal commission I co-chaired with former senator Alan Simpson, the Domenici-Rivlin group, the Senate’s “Gang of Six” and the Obama-Boehner negotiations all worked. It’s a package large enough to put the debt on a clear downward path, relative to the economy, and designed well enough to promote, rather than disrupt, economic growth. It’s a package that includes real spending cuts and structural entitlement reforms to make Social Security solvent while slowing the growth of federal health spending while protecting vulnerable populations. And it’s a package that institutes fundamental tax reform that simplifies the code and encourages economic growth by cutting spending in the tax code to reduce rates and generate additional revenue for deficit reduction.
Most important, it’s a package that can get bipartisan agreement. I was very encouraged by House Speaker John Boehner’s remarks Wednesday indicating his willingness to support increased revenue from tax reform if it were accompanied by meaningful entitlement reform. Based on my conversations with President Obama, I am confident that he is willing to do his part to put our fiscal house in order and would support a comprehensive plan based on the general framework the fiscal commission put forward. While there will undoubtedly be many honest disagreements about the specific elements of a plan, I believe that both leaders are willing to make the type of principled compromise necessary to reach an agreement.
Though we won’t be able to enact the entire plan in the few legislative weeks before year’s end, policymakers could agree in the lame-duck session on the basic framework of the deal. Congress could enact a “down payment” of savings from spending and revenue policies, along with a process for achieving the remaining savings by July 4, with enforcement mechanisms to ensure that the promised savings are achieved. Designed appropriately, such a package would be credible enough to allow for a temporary delay of the scheduled sequestration policies and extension of expiring tax cuts.
I am confident that the president and Congress can agree to such a plan. Nearly three years’ worth of work has gone into developing the policies and raising awareness on the need for a comprehensive plan. Members of both parties and both houses understand this. So do concerned citizens across the country — 300,000 of whom have signed a petition at FixTheDebt.org, demanding that Washington act.
The only ingredient missing is political will. Betting the country in the hopes of generating that political will is not the answer. Coming together for the greater good is.
Tulsa World | November 8, 2012
For almost a decade and a half, I was honored to serve the great people of northeastern Oklahoma in Congress. Today, a centrist Democrat in Congress may be about as rare as a polar bear in northeastern Oklahoma, but through my experience as a fiscally-conservative Democrat on the Ways and Means and Budget Committees, I was able to see how much agreement there was between the two parties, and how deals can be struck when there's a common interest. Even in today's climate of hyper-polarization, this remains true, and even for this era's most important issue: the national debt.
Having hit $16 trillion with no signs of slowing, the national debt promises to eat away at your favorite government policy, regardless of your party or politics.
Whether you prefer to maintain spending levels on, say, transportation programs or scientific research, or you're more interested in keeping taxes low, your preferred policy is about to be swallowed up by what we need to pay to service our debt. Unless we act now.
And now really is the time to act. With the "fiscal cliff" - the club-footed combination of tax hikes and spending cuts, $500 billion in 2013 alone - looming come Jan. 1, our political leaders have been given a firm deadline to get something done.
Already, mere fear of careening over the cliff has had real-world implications. Worry over paralysis in Washington has caused businesses to put off hiring and investments. And if we do tumble over the edge, our economy will contract by an annualized 3.9 percent in the first quarter of next year.
Clearly, we cannot let that happen. But in addressing the short-term problems with which our out-of-control debt has confronted us, we must also think long-term. We are perilously close to trillion-dollar yearly interest payments, 7 percent yields on 10-year U.S. Treasury bonds, 10 percent home mortgage rates and 13 percent rates on car loans. For the good of the country, the parties must come together and not let this happen.
Clearly then, we need a debt deal that will steer us away from the precipice of the fiscal cliff while addressing our mounting debt over the long-term.
Any deal worth the paper it's printed on must make sure to treat nothing as sacrosanct. Any promise made to keep a constituency's favored spending program or tax break is short-term thinking; unless we put everything on the table, we will never come close to plugging the hole we're in.
For the last several years, the conversation about deficit reduction has begun and ended with "domestic discretionary spending" or "waste, fraud and abuse." Simply put, there's just not enough of either to make much of a dent in our ever-increasing debt. Instead, we need to look at what each party has previously thought of as its "sacred cow" - spending programs, especially entitlements, for the left and favored tax levels and breaks for the right.
Instead, we need pro-growth solutions - a slowing of the growth in entitlement spending and a simpler tax code that removes many of its economy-distorting deductions, breaks and exemptions. It's this kind of plan I'm hoping to hear from the president, and it's this kind of plan that I know members of Congress from both parties can and will be able to agree to.
I've seen much agreement across party lines when it comes to fiscal issues. And I am optimistic that, even in this age of political polarization, that we'll be able to do so again.
But we'll need your help. Think about adding your name to the 280,000-plus who have already signed the petition at FixTheDebt.org, demanding our political leaders deal with the long-term problems our mounting debt promises to bring us. Our challenges are great, but so too is our ability to come together and confront them head-on.
The Government We Deserve | October 18, 2012
For almost anyone following closely our presidential candidates’ statements, it is absolutely clear that each pledges more than he can deliver. As a result, we must vote for the candidate who can better govern after over-promising.
Consider especially the big three items driving upward the budget deficits: growth in health costs, growth in retirement costs, and the tax cuts that keep passing our bills and related interest costs onto future generations. One simply can’t balance the long-term budget without dealing with these three. Yet both Obama and Romney remain largely silent about what we might have to give up in these arenas for years to come.
Social Security reform? “We can easily tweak the Social Security program while protecting current beneficiaries, ensuring that it’s there for future generations,” President Obama says. “[I am not] proposing any changes for any current retirees or near retirees, either to Social Security or Medicare,” Governor Romney proclaimed at the first presidential debate.
Medicare? The president fights to retain long-run hopes for “well over $1 trillion” in cost savings that he thinks are in Obamacare. But the Congressional Budget Office says that Obamacare raises health costs overall and that any long-run savings are just that, long-run, as well as uncertain. Romney would replace Obamacare and restore additional Medicare-directed spending. CBO numbers say that simply abandoning Obamacare would add to the deficit since the bill also includes tax increases and other measures that more than offset the health cost increases.
As for premium support or vouchers versus traditional Medicare, the candidates do engage in a debate, but generally over changes that would be phased in at some time long distant from when they need to tackle the deficit. Taxes? Romney proclaims that his reform would reduce revenues or at best be revenue neutral: “We are not going to have high-income people pay less of the tax burden than they pay today. […] I do want to bring taxes down for middle-income people.” He would also cut tax rates by 20 percent and “keep revenue up by limiting deductions and exemptions,” or perhaps he would do less, if those limits don’t supply enough revenues. Obama, in turn, holds with his promise from the last campaign for no tax increases for anyone making less than $250,000. Analysis after analysis shows that keeping this promise would entail only modest progress on the deficit.
Discretionary spending? Although not one of the big three drivers of our budgetary problems, both candidates would pare it dramatically as a share of GDP, but their campaigns only emphasize what they would protect. Obama would invest in education, and Romney now likes Pell grants, though he would give Big Bird some liposuction. Romney says he would somehow maintain a higher defense budget than Obama.
These candidates are not the first to try to tell us how much they will do for us or at least how they will absolve us—particularly the woe begotten middle class—from sharing in any future budgetary fix. Their complication, even compared with previous presidential elections, is that their new promises stack onto an extraordinary and unprecedented number of unsustainable promises already put into law. I understand why they are scared to death to tell us what reforms might really be required; we voters often jump on the honest candidate and, hence, bear some responsibility for what we get. But that means that in deciding for whom to vote, we must speculate on just which pledges either candidate would violate.
Should we prefer the candidate more willing to declare “oops” once elected?
Do we vote for the one whose future contradictions we believe will be less likely to affect our favorite interests?
Do we favor the politician more adept at dissimulating his past statements?
Consider many of the recent budget agreements and systemic reforms that required us to give up something. Reagan abandoned his opposition to removing tax breaks both in the budget agreements and the major tax reform legislation he signed. He also reversed his previously successful efforts to provide zero and often negative tax rates on some investments. Clinton abandoned his pledge for a tax cut soon after being elected. George H.W. Bush famously abandoned his “no new taxes” pledge. And while poor H.W.’s dissimulation efforts were unsuccessful, conservative and liberal pundits still place Reagan and Clinton high in their respective pantheons.
The president is the only elected official who represents all the American people. The office demands a higher order of integrity and just plain arithmetic discipline than does the role of candidate. In the end, therefore, we probably pick whomever we think better recognizes that the switch from candidate to president is more of a leap than a transition.
The Hill | October 16, 2012
In representing the great people of southern Minnesota for 12 years in Congress, I witnessed my share of partisan skirmishes. But as a centrist Democrat, I also took part in efforts in which both parties worked together to do what was right for the country. We did that in my very first term, when President Reagan found common ground with the Democrat-controlled House and the Republican-controlled Senate to pass much needed Social Security reform. Later, in bipartisan fashion, Reagan and Congress fashioned immigration reform and a major tax overhaul and simplification. In my last congressional term, President Clinton led a bipartisan coalition to pass the North American Free Trade Agreement (over the objection of some in his own party). After retiring to Minnesota, I watched as Clinton then worked with a Republican Congress to enact a children’s health initiative and welfare reform.
Today there is another critically important issue that requires bipartisan cooperation – our nation’s skyrocketing national debt.
The time is now because we are standing on the edge of the “fiscal cliff.” At year’s end, we face abrupt, nearly across-the-board spending cuts totaling almost $1 trillion over the next ten years. The effect of these cuts is coupled with the expiration of numerous tax policies, including the Bush era tax cuts and the Obama payroll tax cuts. The non-partisan Congressional Budget Office estimates that if we fall over the cliff come January 1, the economy will contract by an annual basis of 3.9 percent in the first quarter of 2013 – and unemployment will spike. Already, fear of the cliff – and of Washington politicians doing nothing to avoid it – has led to businesses putting off new hiring and investments.
But that’s just the immediate problem. Over the long-term, our national debt – now at $16 trillion – is simply unsustainable. Indeed, our rising debt threatens our standard of living and the resources we will have in the future. Simply servicing the bloated debt will soon lead to annual trillion-dollar interest payments and will eventually result in interest rate hikes that will make it harder for average people to borrow money to buy a home or a car.
Many politicians talk about cutting “domestic discretionary spending” and “waste, fraud and abuse” as an answer to our deficit challenge. But those items are too small a portion of our federal budget to offer a solution. Instead, we need a balanced, comprehensive approach that will look to both sides of the ledger – spending and revenue. And, more importantly, on the spending side we need to focus on the drivers of our debt, entitlement programs. While raising revenue, it is best to also reform our tax code to eliminate or reduce economy-distorting deductions and loopholes. Lastly, the right kind of long-term debt deal must make sure to protect our fragile economic recovery – meaning these large-scale spending and revenue measures must be phased-in over time.
Getting politicians of both parties to agree to a debt-reduction program that accomplishes all of these goals may seem like a herculean task. But my experience tells me it can be done. There is much consensus already in place for what we need to do. The Simpson-Bowles Commission report and the Rivlin-Domenici plan both prove that there can be bipartisan support for a comprehensive approach to this fiscal challenge. With the “fiscal cliff” looming, I truly believe that the petty politics of the moment will soon give way to the urgency of action.
As the Presidential debates continue, I certainly hope that President Obama and Governor Romney lay out concrete plans to address the debt and avert both the near-term “fiscal cliff” and the long-term debt crisis. But if they don’t, voters need to let them – and Congress – know that the time is now for serious action. You can do this by adding your name to the 225,000 who have already signed the petition at FixTheDebt.org, which urges passage of a comprehensive deal to create a short- and long-term fiscal fix.
My own experience in Congress makes me confident that we can get this done.
The Hill | October 3, 2012
Three weeks into the Comeback America Initiative’s almost five-week fiscal responsibility bus tour, it’s clear we have a real showstopper on board with us: a 100-pound, 10-foot-long digital display whose flashing digits tell their own story. This “U.S. Financial Burden Barometer” is a much truer measure of the country’s financial sinkhole than the well-known National Debt Clock, which debuted in 1989 at $2.7 trillion and has since grown to more than $16 trillion. The Burden Barometer makes that stunning number seem like small change: at present, the barometer’s tally is at more than $70 trillion and is growing by $10 million a minute! That’s up from about $20 trillion in 2000.
The Comeback America Initiative created the Burden Barometer to engage voters on the full dimensions of our fiscal challenge and encourage them to pressure candidates for national office to get serious about solutions — or pay the price on Election Day. While the Debt Clock shows our country’s current gross federal debt, the Burden Barometer reflects the federal government’s total liabilities, unfunded promises and other commitments and contingencies.
The $70 trillion figure incorporates liabilities such as publicly held debt; unfunded military and civilian pensions and retiree health obligations; unfunded social insurance promises, most prominently, Medicare and Social Security; and a range of other federal commitments and contingencies, including the Federal National Mortgage Association and the Pension Benefit Guaranty Corporation. To arrive at an official and credible tally, we used the figures in official financial statements of the U.S. government and other official government reports, among them the annual Social Security and Medicare Trustees Reports and the Congressional Budget Office’s current projected deficit for fiscal 2012.
Clearly there’s creative accounting in many politicians’ assessments of the nation’s fiscal condition — and plenty of demagoguery, too, from partisan and ideological players who want you to think we don’t have a problem or that there are easy answers. Economic growth alone can’t fix our woes and more tax cuts will not pay for themselves. We need to start making tough choices.
If a politician says there’s no need to reform our social insurance programs, don’t believe it. We have to combine Medicare, Medicaid and Social Security reforms, along with other reductions in defense and other federal spending, with revenue increases or the math just won’t add up. In addition, we must rationalize our healthcare promises and focus on controlling costs.
The good news is that serious action, taken soon, can slow the Burden Barometer’s rise, and even significantly reduce the number being displayed. That’s because, unlike the Debt Clock — which won’t drop by a dollar due to fiscal reforms — the Burden Barometer includes present and future spending as determined by our government’s promises and policies. If our elected officials enact meaningful reforms, even if they are phased in over time, the Burden Barometer’s number could instantly go down by tens of trillions of dollars.
Whether that incentive will be enough is an open question. The truth is, our greatest deficit today is one of leadership. It will take political courage and extraordinary presidential leadership that we haven’t seen in the past 10 years to bridge the partisan divide and reach the sort of grand bargain needed to avoid a U.S. debt crisis. But we know this is possible because a number of Republicans and Democrats have already gotten behind nonpartisan solutions that can get bipartisan support.
For example, some within each of the parties have agreed we should change current formulas and premium subsidy models to provide greater support to lower-income individuals and less support for higher-income beneficiaries. They’ve acknowledged the wisdom in reining in healthcare costs by changing the way we pay for medical care — moving away from fee-for-service system and toward “outcome based” payments — and reforming our medical malpractice system. They’ve gotten behind the idea of closing various tax “loopholes” to make the system simpler and fairer, and to generate more revenue. What we need is more elected officials to join them in breaking partisan ranks and putting the interests of the country before the special interests and partisan ideology.
The stakes for our country are huge, and the time for action is now.
The Government We Deserve | October 4, 2012
My fellow Americans.
Grave issues face this country. This year is unlike any other year. After listening to the Presidential candidates debate, I’ve decided to give Americans a real choice for president: me.
First, a little bit about myself.
I know what it’s like to be poor. My great-great grandfather was poor, so I understand getting by on almost nothing. I can think back to a time when he didn’t even have indoor plumbing.
I know what it’s like to be a minority. I’m a male, and the majority of the population is female. Most people belong to religions other than mine. Only a small share of the population is my age.
But, unlike my opponents, I don’t identify with some narrow subgroup of the population. I support the right of women and men of all races and religions to pursue the American dream––as long as they agree with my policies. Now, one of my opponents has special appeal to female Tibetan Scientologists from Utah, the other to black male lumberjacks living in New York City. That means the rest of you still have a chance to be represented by voting for me.
In today’s troubled world, I know what it is to be a real man who deals with power. Just thinking about putting troops or police in harm’s way exhausts me. Heck, my hair has already thinned and grayed thinking about the sacrifices I will have to endure as the most powerful person in the world. I’ll try to make available some before-and-after pictures for you to see, too, how eight years in the White House will age me eight years. One day, others will testify how they witnessed my bravery when they weren’t out grabbing me another Diet Coke so I could stay awake past midnight in the Situation Room.
And, I know what it’s like to be a woman. My mother was a woman. I know all too well the difficulties of childbirth: I was right there next to my mother when thrown into the spurned class of the bare at birth. Now, as a candidate, I’m not supposed to talk too sympathetically about myself, but my surrogates have put together candid shots of what my mother, if still alive, would have said about my destiny even from a young age. Other women who have known me when I was out in the working world pursuing my destiny while they were taking care of the family will talk about my humanity and dedication to my family.
Finally, I know what it’s like to struggle. At times I’ve even been between jobs. After leaving the presidency, I’ll have to struggle while I decide whether to sit on corporate boards or make millions of dollars writing my autobiography.
But enough about me. Now to real policy for real Americans––that is, those who show their respect for America by voting against my opponents.
First, you. You’ve paid an unfair share of taxes and gotten an unfair share of benefits. You’re not like that rich guy who pays no income tax or the welfare cheat with houses in Malibu and Miami. They support my opponents. But I understand you. If you’re rich, you already pay infinitely more tax than someone with no income with which to pay taxes. That’s not fair. And if you’re poor, it’s clearly because my opponents’ government policies don’t support you enough or don’t give you adequate incentives. That’s not fair, either.
As for the 99.5 percent of you who are in the middle class, my opponents continually tell you how much they care, but they really don’t. If they did, why do they confine their borrowing from China and other friendly lenders to a few trillion dollars?
Next, jobs. My opponents hire Harvard economists who calculate the expected growth in the labor force assuming that the unemployment rate will decline to about 5 percent. Then each claims that he individually will create the jobs that the economy would normally create. Not me. Under my policies, the unemployment rate will fall to 4 percent, so I will create at least 1 million more jobs than either of my opponents.
To spur economic recovery, I’ve combined the Democratic Keynesian and Republican supply-side economics of my opponents. That means I can spur demand when I provide you more benefits and increase supply when I reduce your taxes. The former will induce people to spend more, the latter will encourage them to work and save more. Under Steuerle-conomics, a dollar of spending and a dollar of tax cuts will together spur several dollars of increased output, while reducing the deficit because of the economic expansion and investment.
And let me thank you in advance, my fellow Americans, for accepting those higher benefits and lower taxes for the good of your country.
As for the budget, I will take whatever increased deficit I might induce and cut it by two-thirds by the end of my two terms. My opponents pledge to cut their additional deficits only by half, and usually for years after they’ve left the White House.
I could go on. For instance, one of my opponents favors healthcare vouchers for the nonelderly and opposes them for the elderly, the other favors just the opposite. Both my opponents would reduce Medicare benefits, either through vouchers and greater price controls. I, however, would grant healthcare providers higher incomes and health consumers more benefits than either of my opponents. And it won’t cost existing taxpayers or Medicare recipients a dime. I’ll just create a special form of government debt that will be paid only by future generations not yet voting.
As you can see, I have everything it takes to run for president in today’s world. I simply take today’s campaign strategies to their logical conclusions. Honest deception! That’s my motto.