The woman who served as the first director the Congressional Budget Office is in Iowa today, warning the federal debt is a “threat to future prosperity.”
Alice Rivlin is a member of the steering committee for a group called “Fix the Debt.”
“I think it should be called ‘Fix the Debt and Fix the Economy,’ but that’s too long. People can’t remember that,” Rivlin said this morning, with a laugh, “but we need to grow the economy and we need to fix the debt.”
Rivlin has been a governor in the Federal Reserve system and she served as director of the Office of Management and the Budget during the Clinton Administration.
“The federal debt, as you look ahead if we do nothing, will grow faster than our economy can grow and that’s just trouble,” Rivlin said during an interview with Radio Iowa.
Rivlin and the rest of the “Fix the Debt” group argue the “gridlock” in Washington, D.C. needs to be broken because it’s time to slow the growth in Medicare, Medicaid and Social Security.
“When you say that, it sounds scary. It sounds scary to seniors. It shouldn’t. We don’t mean that Medicare or Medicaid and Social Security are going to go away or even that benefits are going to be reduced, but they won’t grow as fast as they would otherwise and that’s important because we’re going to have a lot more seniors and health care costs keep rising,” Rivlin said. “We’ve got to slow those down.”
The other component of the “Fix the Debt” strategy is tax reform that would yield a “simpler, more growth-friendly tax code.”
“That’s hard work because people benefit from all kinds of exemptions and deductions and exclusions that tax away from the tax base,” Rivlin said, “but if we reform our tax code and broaden our base — that is the income to which tax rates apply — then we can raise more revenue and even have lower tax rates.”
Breaking the gridlock in congress, though, will require action from Americans, according to Rivlin.
“That’s the point. They’ve got to hear from the public,” Rivlin said. “The public has got to weigh in and say, ‘This sequester deal is terrible.’ It is a mindless, stupid thing to do and it doesn’t solve the basic problem.”
Rivlin and State Auditor Dave Vaudt, a Republican, will speak about the “Fix the Debt” campaign during a midday event in Des Moines.