Kasich, Penny Discuss Risks and Solutions

Blog Post
Monday, February 26, 2018

Ohio Gov. John R. Kasich and former U.S. Rep. Tim Penny warned Friday that irresponsible fiscal policies are jeopardizing the nation’s future, but the two former congressional colleagues also pointed towards a number of possible solutions.

Kasich, who served as chairman of the U.S. House Budget Committee and sought the 2016 Republican presidential nomination, said the federal debt -- now well over $20 trillion -- is so large that it is difficult for people to grasp and care about.

“But at some point,” he continued, “this will have a dramatic impact on our economic growth, which will in fact divide this country even more than it is currently divided.”

Penny, who as a Democratic representative from Minnesota in the early 1990s co-sponsored bipartisan deficit-reduction efforts with Kasich, lamented recent tax and spending legislation that will require significantly larger federal deficits in coming years.

The two discussed their views Friday at a Concord Coalition program entitled “Fiscal Freefall: When Will It Stop?” Held at the National Press Club in Washington, the program was moderated by Robert L. Bixby, Concord’s executive director.

On the positive side, Kasich said that innovation and technological advances could enable the government to become more efficient and better able to meet its fiscal challenges.

“I don’t believe that creating savings on operation of our government means somehow we have got to go out and hammer somebody,” Kasich said. He added that “things are changing so fast that there are ways in which you can make enormous savings without having to hurt anything. That’s the beauty of technology -- better ways to do things, and it just takes the will to do it.”

He said, for example, that substantial amounts of money could be saved on Medicaid and Medicare without harmful effects.

He added: “How about having a health care system that’s based on quality, not based on quantity? How about if you went to the doctor and they treated you for what you had, not 18 billion tests . . . How about some managed care, some coordinated care for people on Medicaid and Medicare? These are things that can go a long way. It doesn’t mean you’ve got to hurt anybody in the process.”

Kasich also expressed enthusiasm about the potential impact of younger Americans on the political system, saying that “when we look at kids today, we are seeing a new level of activism. I am so excited about what I’m seeing in this country with the young people. Thank God!”

Penny, who is the president of the Southern Minnesota Initiative Foundation and a member of The Concord Coalition’s Board of Directors, said part of the solution to the nation’s fiscal difficulties should be “more truth-tellers about paying for what we say we want. And I think there’s an audience for that.”

He, too, struck a hopeful note about younger Americans, saying that Millennials seem to understand better than older Americans that “you can’t get something for nothing.”

Penny and Kasich both stressed the harmful consequences that the rapidly growing federal debt could have for younger Americans. Kasich said that he had emphasized to young people: “When that debt goes up, your job opportunities goes down, and when the debt goes down, your job opportunities go up.”

Penny underscored the need for entitlement program reforms. He said Social Security, Medicare and Medicaid “are consuming a larger and larger share of the total budget, which inevitably crowds out everything else.”

Last year Medicare alone used about $300 billion in general fund money, he said. This money covered costs that are not paid for by Medicare premiums or Medicare payroll taxes. Penny pointed out that this equaled a significant portion of the federal deficit, which totaled $666 billion in Fiscal 2016.

“And it only gets worse as times go by,” Penny added, “because 10,000 baby boomers are retiring every single day.” This means many of them will stop paying Social Security and Medicare payroll taxes and start collecting benefits from those programs.

Penny said that current fiscal policies amounted to “intergenerational theft.” Kasich’s view:  “I know my kids are going to be paying for the sins of our generation.”

The governor was harshly critical of elected officials in Washington: “They are all in on the game, all of them -- spend money like there’s no tomorrow.” Although in the late 1990s the federal government was paying down its debt, he said, “we’re all drowning in red ink now.”

But stronger political leadership, he said, could help put the country on a more responsible course.