WASHINGTON -- The Concord Coalition today offered its strong support for the new fiscal framework proposed by Erskine Bowles and Alan Simpson to put the nation’s unsustainable finances on a sound, responsible path. In Concord’s view, the Simpson-Bowles framework offers a stark and welcome contrast to narrow partisan plans that may please the respective party bases but have no chance of being enacted and thus no chance of solving our fiscal problems.
“Some people on both sides of the aisle seem content to let a disaster hit, blame it on the other side, and then try to clean up the damage,” said Concord Coalition Co-Chair Sam Nunn. “Our nation can't continue to afford such political brinksmanship. Neither side is ever going to get 100 percent of what it wants no matter how many gimmicks are used to gain the upper hand in negotiations.”
“It is time to replace crisis-management budgeting with a strategic framework that deals with the real problems facing the budget and the economy. In my view, the common-sense recommendations released today by Erskine Bowles and Alan Simpson are right on target. They should be put to use immediately as a guide to this year's budget process. The sequester that will automatically occur on March 1 is mindless and leaves untouched the parts of the budget that are causing the underlying long-term problem. I am hopeful that some brave souls in the Congress will propose the updated Simpson-Bowles framework as a substitute for the misdirected and ill-timed sequester," Nunn said.
While policymakers can claim some credit for beginning to bring the nation’s finances under control, the debt is still on track to grow faster than the economy, and the most difficult decisions – those involving health care, Social Security and tax reform – remain to be made. That task must be the focus of the coming budget debate, and the Simpson-Bowles framework serves as an excellent starting point for negotiations.
“This is a credible, responsible and comprehensive framework for addressing the nation’s growing debt burden, which will reach unsustainable levels if no action is taken,” said Concord Coalition Executive Director Robert L. Bixby. “It cuts through partisan rhetoric and confronts the hard trade-offs that must be made between spending, taxes and debt. For those who are afraid to ‘go first,’ it offers a way forward.”“In any plan large enough to get the job done, there will be individual elements that some will find objectionable. The question for Congress and the President is whether, in pursuit of a brighter fiscal and economic outlook, they are willing to accept parts of a plan they don’t like in exchange for parts they do like. The Simpson-Bowles framework is not for those who only want to use our fiscal challenges to score partisan points against each other. It is a blueprint for those who want to be part of the solution,” Bixby said.
The Concord Coalition has long maintained that our fiscal challenges are sufficiently large that it is unrealistic to think that we can deal with them all by just cutting other spending or by just raising taxes. We must put everything on the table and arrive at a package of reforms that is big enough to stabilize the debt-to-GDP ratio. But even this would not be sufficient unless the policies enacted to achieve that level of deficit reduction are capable of producing growing savings over time. Both size and composition matter. So too, does timing.
Any plan must be phased in to avoid harming the fragile economic recovery. But enacting a plan now with verifiable and growing savings will instil confidence that the United States is ready, willing and able to do what it must to get its fiscal house in order.
A key feature of the Bowles-Simpson framework is that it requires broad sacrifice. It does not attempt to reduce the deficit through either spending cuts or tax increases alone. Instead, it puts all parts of the budget in play and does not pretend that popular programs can be exempted from scrutiny or that no new revenues are needed.
“In last year’s Strengthening of America – Our Children’s Future initiative, undertaken with a number of other organizations, we found that bipartisan consensus is both essential and possible to achieve a fiscally sustainable plan to strengthen the economy, save future generations from rising debt, and protect the nation’s security. The new Simpson-Bowles framework is fully consistent with our conclusions,” said Bixby.
The “sequestration” is fast approaching and must be dealt with, but it is the long-term debt burden facing this country that threatens our existence as a global power. More must be done to bring health care costs under control. The tax code is still in need of pro-growth reform. Social Security still faces a growing gap between benefit payments and dedicated revenues. As stated in the Strengthening of America report: “Fortunately, there are those in Washington who put the country’s future before their political parties. Americans should get behind these courageous leaders — and soon. We can no longer afford to act out Winston Churchill’s prediction that America will always do the right thing after it has explored every other alternative. It’s time to do the right thing.”