October 25, 2014

Fiscal Summit Underscores Need for Reform

Former President Bill Clinton and House Speaker John Boehner were among the prominent figures in both parties who decried Washington’s unsustainable path at a “fiscal summit” last week.

The summit, convened by the Peter G. Peterson Foundation, included speeches, interviews, panel discussions and videos featuring Americans around the country.

There was general agreement that elected officials have fallen short in dealing with the nation’s fiscal challenges, including the rapidly growing federal debt and the pressures that are building on Social Security and Medicare. Democrats and Republicans offered starkly different perspectives and prescriptions, however, and there was widespread skepticism that Washington would reach any big agreements before the November elections.

Boehner drew considerable attention with a suggestion that he and other Republicans might risk defaulting on the federal debt unless Democrats agreed to spending cuts in some areas that would equal the proposed increase in the debt limit. While defaulting would be irresponsible, Boehner said, it would be even more irresponsible to raise the limit without budget reforms and dramatic spending cuts.

Republicans put similar conditions on increasing the debt limit last year but President Obama and other Democrats say they will resist such a deal this year unless it includes some tax increases.

Clinton, saying that both parties would eventually have to make compromises, suggested that Republicans were being unreasonable by saying that certain issues -- notably their resistance to additional government revenue – were “non-negotiable.”

He called for a “very tough deficit-reduction plan” that would take effect once the economy had strengthened. Without such a plan, Clinton warned, today’s low interest rates “could go up so fast you won’t be able to catch your breath, and everybody will say ‘Why didn’t we do this earlier?’ ”

While Clinton suggested that after the fall elections both parties would have incentives to make more compromises than in the past, others at the summit tamped down speculation about a broad budget deal in a lame-duck session this year. They included both Rep. Paul Ryan, chairman of the House Budget Committee, and Rep. Chris Van Hollen, the committee’s top Democrat.