A Unified Front Against the Shadow of Debt

Blog Post
Thursday, October 01, 2020

For too long now we have watched as the national discourse has taken a divisive turn. Bipartisanship is endangered, “compromise” a dirty word. This has made dealing with key challenges all the more difficult, including our nation’s unsustainable fiscal path. 

It does not need to be that way, as demonstrated on September 30 by two former congressmen from Texas, Charlie Stenholm (D) and Jeb Hensarling (R), at a virtual forum focusing on our nation’s fiscal policy during the era of COVID-19 and beyond. The event was hosted by The Concord Coalition and Texas A&M University School of Law.

 

Tori Gorman, Concord’s Policy Director, began with a thorough rundown of the fiscal outlook, including the various measures the government has taken to address the COVID-19 pandemic and why we were already on an unsustainable path before these measures were taken. She pointed out that while higher deficits in the near-term were justified as a response to the pandemic, policymakers would need to address the preexisting and growing gap between future spending and revenues once the current crisis has passed. 

Gorman said that legislative actions to support the economy as it struggles with the fallout from COVID-19 will see the deficit for fiscal year 2020 reach $3.3 trillion, triple what it was projected to be just months ago. This, and the lingering economic effects of the pandemic, are projected to take debt held by the public from 79 percent of GDP in 2019 to 98 percent in 2020. By 2021, debt-to-GDP is projected to reach 104 percent, surpassing the size of the nation’s economy. 

To view Gorman’s presentation, click here.

“The current era of political polarization, close elections and aging societies gives politicians on both sides strong incentives to leave the debt for future generations,” Gorman said.

A bipartisan panel discussion featuring Stenholm and Hensarling, moderated by Concord’s Executive Director Bob Bixby, followed Gorman’s remarks.  

As Congressmen, Stenholm and Hensarling were both heavily involved in budget battles and remain concerned about the country’s trajectory. 

“Anyone understands that if your debt exceeds your income then you are beginning to have a problem,” Stenholm said. “When a country's income, gross domestic product, is exceeded by debt a country has the same problem.” 

Hensarling agreed and suggested that policymakers should learn from past failures to think ahead. “Probably the most damning indictment (of the 9/11 commission report) was that we as a country and we as policy makers had a failure of imagination. I think that we as a society have failed to imagine ultimately what the consequences of this debt will be.”

Both congressmen pleaded with current and future lawmakers to stop labeling certain budgetary items as untouchable. Stenholm leaned in on this point, telling Democrats that Social Security has to be addressed and telling Republicans that they need to stop emphasizing tax cuts as much as they do because tax cuts that do not contribute to growth are just as damaging to the budget and deficits as overspending.

“You cannot grow your way out of the (debt) by large tax cuts that go to the top 1 percent,”  Stenholm added. “Given what has happened to our economy over the last 40 years you are going to have to start cutting spending straight across the board, but with a scalpel, not with a meat axe.”

When asked what advice he would give to members of Congress and the 2020 candidates, Hensarling said, “Never say what you will never do.”

“If you have Republicans coming in saying, ‘I will never raise taxes;’ if you have Democrats coming to Congress saying, ‘I will never touch entitlements, then I’m not sure there is any solution or hope for this country,” he explained.

The panel closed the event by warning the audience that actions must be taken soon because future generations have the most at risk. 

“The good news is that it is not too late but it is getting more expensive and more difficult to address this every day,” Hensarling said. “There are very few people your age who have even thought about the national debt and you will have a lower standard of living, fewer options if you don’t be part of the solution and help educate your fellow students and hopefully succeed where Charlie and I pulled up short.”

This bipartisan conversation took place the day after an acrimonious presidential debate rightly alarmed many Americans about the political process. In that context, it was inspiring to see these former lawmakers from different sides of the aisle coming together to talk about real, substantive issues with a genuine respect for each other as both former congressmen and fellow citizens. 

We need more such dialogue and The Concord Coalition will continue to do all we can to make that happen. If you would like to aid us in that effort, please reach out to Concord’s National Field Director, Phil Smith, at [email protected]