Ask Presidential, VP Candidates Key Questions on Debt

The following guest column by Sara Imhof was published by the Iowa City Press-Citizen on Friday, Aug. 17, 2012.

See the original column here.

The challenges facing our federal government are many: At the end of the year, we face a “fiscal cliff” as pre-programmed tax increases and spending cuts take effect all at once, threatening the fragile economic recovery. Yet if all these policies are simply extended, we’ll soon face another fiscal cliff in the form of accumulating debt and interest payments.

We need to address both fiscal cliffs, and soon.

Our aging nation is undergoing an unprecedented demographic transformation and a permanent rise in the cost of popular programs such as Social Security, Medicare and Medicaid. Moreover, special tax breaks alone now drain more than $1 trillion per year in lost revenue. Finally, we are slated to run an annual deficit in excess of $1 trillion for the fourth straight year.

Oh, and it’s an election year.

Voters must demand realistic solutions to our fiscal challenges. Because the projected gaps between future government revenue and expenditures are so large, nothing should be left off of the negotiating table. Covering the gap will require bold solutions that include tough choices for both government spending and revenues.

So far, both presidential campaigns have missed the mark.

President Obama’s budget relies on both spending cuts and tax increases to bring the deficit down. In that sense, everything is on the table. The Obama budget stops short, however, of the structural changes needed to keep the debt from rising to more unsustainable levels. After 10 years, the debt actually would be higher relative to the economy’s size.

Mitt Romney previously supported the budget put forward by Rep. Paul Ryan of Wisconsin and just last weekend announced the budget expert as his vice-presidential candidate. Moving forward with all or most of the Ryan budget would reduce the debt faster than Obama’s plan. But Ryan’s plan resorts to implausible assumptions to get there and relies almost entirely on spending cuts.

According to the nonpartisan Congressional Budget Office, Ryan’s budget would require that spending on everything other than Social Security, Medicare, Medicaid and defense virtually disappear by 2040, when he claims his budget would finally balance. Further, many yet-unnamed but likely popular tax breaks would need to be eliminated to accomplish his goal of lower tax rates for individuals and corporations without expanding the deficit.

Any politically and economically successful deficit-reduction plan must honestly confront the full magnitude of our fiscal challenges.

To that end, voters should ask the presidential and vice-presidential candidates if they are willing to:

• Support a credible and comprehensive plan that reduces the deficit by several trillion dollars in the next decade?

• Support changes in the tax code that eliminate many of the $1 trillion in tax preferences that now favor specific categories of individuals, companies or industries, and if so, explain what specific changes they will make?

• Detail what must be done to improve the health care system, assure health care quality, expand insurance coverage and curb the rapid rise in costs?

• Implement Social Security reform for long-term sustainability of the program, and if so, specify what changes they will make?

• Suggest credible ways to move forward and compromise in a bipartisan manner — in recognition that neither political party has the strength in numbers or the public credibility to force its own agenda through the Congress?

There are legitimate differences between the parties and these should be thoroughly aired during the campaign. But that debate should be conducted over whose policies would be the most effective and not over whose motives are the most nefarious.

Whoever wins will have to govern and that means compromises eventually will be necessary.

Coralville resident Sara Imhof is the Midwest regional director for the Concord Coalition.