CEO's Simple Fix: Reform Spending and Revenue

Blog Post
Monday, November 05, 2018

Politicians do not want to address the nation’s debt issues because that would require both tax increases and reductions in spending on entitlement programs, said David Cote, former CEO of Honeywell.

“It is just basic math that no one wants to address,” he said on the latest “Facing the Future” program.

Cote served on the National Commission on Fiscal Responsibility and Reform (Simpson-Bowles), a 2010 bipartisan panel created by then President Obama, and was a director of the Federal Reserve Bank of New York.

“Facing the Future” host Chase Hagaman was joined by Cote and Concord Coalition Executive Director Robert L. Bixby to discuss the Simpson-Bowles commission’s work and changes in the economic and political climates.  

“The job at hand was to develop a proposal for addressing the debt,” said Cote about the fiscal reform commission. “The result was a $4 trillion debt reduction package.”

The package, which 11 of the 18 members of the bipartisan commission supported, never made much headway in Congress or with Obama.

“If you went through the $4 trillion of ideas that we had, there certainly are things that could be picked out that could be done now,” Cote said. “The big items, tax simplification . . . Medicare and Medicaid have to be addressed.”

“If you vote for people who give you simple solutions, like ‘We will grow our way out of it,’ or ‘We just have to tax the wealthy more,’ they are lying to you,” Cote said. “If you vote for people like that then don't be surprised when the problem continues to grow.”

Later on the show Steve Winn, Concord’s communications director, discussed a recent Congressional Budget Office report on Overseas Contingency Operations funding for the Defense Department. This money is supposed to used for military conflicts abroad and allocated on a temporary basis. This funding is separate from the basic Defense budget that Congress approves each year.

“There had been a total of $2.2 trillion on top of the base federal budget” since 2001, Winn said. “Some of that $2.2 trillion is legitimate but what the budget office is saying is that increasingly the Pentagon has been using part of that money for routine expenses.”

He added: “It is just sort of doing an end run around the budget process, and it could be an end run around budget caps that were established in 2011 on Defense as well as other types of spending.”

Chase Hagaman hosts “Facing the Future” each week on WKXL, NHTalkRadio.com (N.H.), which is also available via podcast. Join him and his guests as they discuss issues relating to national fiscal policy with budget experts, industry leaders, elected officials and candidates for public office. Past broadcasts are available here. You can now subscribe to the podcast on iTunes, Google Play or through RSS.