September 2, 2014

Leaders of Bipartisan Panels Say Fiscal Reform Can Be Done

Who says deficit hawks have to be pessimistic?

Nearly two years ago two prominent bipartisan groups produced comprehensive plans to put the federal budget on a sustainable course. On Monday, at the second forum of the new Strengthening of America initiative, co-sponsored by The Concord Coalition, the four co-chairs of those panels explained how they did it -- and expressed reasonable hopes that elected officials would eventually be able to do so as well.

Most members of the National Commission on Fiscal Responsibility and Reform reached agreement on a bipartisan plan that Co-Chair Erskine Bowles described as balanced and reasonable. "They did it," he said, "because they thought it was the responsible thing to do, because they thought it was the right thing to do."

He added: "I’m convinced that if we do this, the future of this country is very, very bright, and we can compete with anybody, with the best and brightest wherever they are."

In addition to Bowles, a former White House Chief of Staff, others who spoke in the section of the program devoted to bipartisan plans for fiscal reform were the other co-chair of his commission, former Senator Alan Simpson (R-Wyo.) and the two co-chairs of the Bipartisan Policy Center’s Debt Reduction Task Force: Alice Rivlin, a former White House budget director, and former Senator Pete Domenici (R-N.M.).

Working separately, the two panels produced plans that would reduce projected federal deficits by roughly $4 trillion over the next 10 years, with the goal of stabilizing the federal debt relative the country’s economy.

Simpson emphasized that even though there was "a remarkable range" of  opinion on his panel, its members were able to develop recommendations such as a package of responsible reforms for Social Security. Illustrating the hurdles such reform efforts often face, however, he likened the opposition of some senior advocacy groups to "the keening wail of a coyote."

The former senator also explained some of the reasons why he thought substantial amounts of money could be saved in defense spending. When officials in the Department of Defense were asked how many contractors they employed, the response was somewhere between one million and ten million – which Simpson noted was "quite a range."

Bowles identified rising health care costs as a critical problem, noting that the United States spends much more than other countries but without better health statistics to show for it. Other key areas for reform, he said, included defense, Social Security and a tax code with $1.1 trillion a year in "backdoor spending."

Domenici said his task force concluded that a broad array of policy changes were necessary. While "none of them would do it alone," he said, "all of them combined could do their fair share."

He was particularly emphatic in calling for fundamental changes in the country’s "cumbersome, anti-growth" tax policies. He described tax reform as "a rare opportunity to do two or three things this country desperately needs with one shot."

Rivlin said the country faces two big challenges: achieving more rapid economic growth, and putting the federal debt on a sustainable path. It is critical, she said, to do both things simultaneously.

On the positive side, she said, legislation last year already cut discretionary federal spending by about $1 trillion over the coming decade -- about what the two bipartisan deficit-reduction panels had recommended.

She emphasized the importance of reducing the growth in health care spending not just for the federal government but for state and local governments as well as the private sector. Both parties, she said, recognized that Medicare reforms could help improve the entire health care system.

The work of groups like The Concord Coalition, Rivlin said, provides evidence that average people actually understand the need for fiscal reform better than politicians do. With sufficient information about the fiscal challenges and possible solutions, she said, average people often agree on recommendations that resemble those of the Simpson-Bowles and Rivlin-Domenici panels.

Domenici agreed, saying: "People understand the word 'broke.'"

Strengthening of America is the result of efforts by Domenici and former U. S. Senators Sam Nunn (D-Ga.), Warren Rudman (R-N.H.) and Evan Bayh (D-Ind.) to convene a bipartisan group of former members of Congress for four public forums on the federal debt and related issues.

Nunn and Rudman serve as co-chairs of The Concord Coalition, which is involved in the initiative along with several other organizations: the Center for Strategic and International Studies (CSIS), the Bipartisan Policy Center, the American Business Conference, the James A. Baker III Institute for Public  Policy at Rice University, the Hoover Institution at Stanford University, and the Belfer Center for Science and International Affairs at Harvard University.