This week on Facing the Future we were privileged to have two former U.S. Senators, Kent Conrad (D-ND) and Rob Portman (R-OH). They have been lending their voices to the push for a new bipartisan fiscal commission that would propose solutions to our nation’s unsustainable budget outlook.
Conrad represented North Dakota in the U.S. Senate from 1992 to 2013. He served as Chairman of the Senate Budget Committee from 2001 to 2003, and again from 2007 to 2013. Portman served as Director of the Office of Management and Budget (OMB) under President George W. Bush. He also served six terms in the U.S. House of Representatives and two terms representing Ohio in the U.S. Senate.
They began by discussing the seriousness of the budget outlook.
“Not so long ago,” Conrad said, “one of the military leaders of the country said, the debt is the threat. We’re $33 trillion dollars in debt, well over a hundred percent of our gross domestic product. Almost any economist would say to you, that’s a warning signal. It’s not as though you just fall off a cliff, but it leads to a long, slow decline if you don’t manage your finances. So here we are, the debt and the deficits keep rising dramatically.”
“It’s a clear and present danger,” Conrad said, “to our national economic security, our national defense and it’s time to act. The longer we wait, the more draconian the solutions will have to be. That’s a mathematical certainty.”
Portman noted that, “there are only three credit rating agencies, and all three say that we’re in trouble because of Washington’s inability to get a handle on the debt and deficit. Most recently, Fitch downgraded, but also Moody’s has threatened to downgrade. And if we go through another government shutdown, which is not unlikely in January, I believe that Moody’s will also downgrade. That just means higher interest rates for all of us because we’ll need higher interest rates to get people to buy our debt, and that raises rates for everything, including on the commercial side.”
Conrad and Portman said they were alarmed by suggestions at a recent House Budget Committee hearing that the projected insolvency of the Social Security trust fund could be cured by simply transferring general revenues.
“It was very striking to me,” Conrad said, “that members, some of whom I have great respect for, were seemingly open to the magic asterisk in which you just say, ‘Oh, there’s a problem, but not really. We’ll just erase it, or we’ll look beyond it, or we won’t deal with the underlying problem of a mismatch between money coming in and money going out at the end of the day.’ The numbers don’t lie. The harsh reality is we are spending much more than we are taking in. And no magic asterisk is going to change that. It takes real policy changes in order to solve this problem.”
Portman added, “For those who say, ‘well, let’s just find general revenue money and throw it into these trust funds,’ that requires a change in law that, I think, would be very difficult, probably impossible, to get through the Congressional processes. So you’re really taking a huge risk there with the American people and their futures.”
Both Senators said that for a fiscal commission to be successful it must include sitting members of Congress with the possibility of outside experts being added. They also agreed that any commission recommendations should be guaranteed an up-or-down vote in the House and Senate.
One issue they discussed that is of particular interest to The Concord Coalition is the potential role a fiscal commission could play in helping to inform the public about the magnitude of the problem and the need to act.
“It is time for another fiscal wake up tour,” Portman said. While the commission “would be looked at for policy recommendations, it is equally important to explain the problem better to the American people in a way they can understand and in a way that they can appreciate. Because let’s be honest, with low interest rates, we just kept spending and spending and spending, and it seemed like it wasn’t affecting the economy much. Now, with higher interest rates, it’s very different.”
In Conrad’s view, a commission “needs to be used in part as a method of educating people as to the significance of the problem and of the consequences of a failure to act. That is hugely important because the American people have lots of other things they’re worried about. They’re worried about paying the mortgage. They’re worried about getting the kids off to college. They’re worried about health issues of their parents or their grandparents. They’ve got all these things that take their attention. And of course, we also have all these what I call side issues that seem to consume Congress. But we’re not paying sufficient attention to these things that really matter to the economic lives of the American family.
He concluded that it was important to have “this educational effort, barnstorming the country, addressing the problem, describing it and coming up with alternative solutions that people can understand and ultimately support.”
Hear more on Facing the Future. I host the program each week on WKXL in Concord N.H., and it is also available via podcast. Join us as we discuss issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.