August 14, 2017 —
In March 2014, a few months after the 16-day shutdown of the federal government, 80 percent of Americans said they worried a great deal or a fair amount about federal spending and the budget deficit. Each party holds the other responsible for budgetary extravagance. Democrats blame Bush-era spending for the war on terror, while Republicans point to the Obama Administration’s response to the subprime mortgage crisis. In reality, our debt crisis is a slow-motion emergency that has developed in full view of elected officials of all political persuasions for many decades.
All attempts to reach bipartisan agreement on reducing annual deficits and the debt have failed. A recent one showed promise, though, when President Obama, who inherited a $1.3 trillion deficit in 2009, appointed The National Commission on Fiscal Responsibility and Reform. He charged Democrat and former White House Chief of Staff Erskine Bowles and retired Republican Senator Alan Simpson with producing a grand bargain that would bring long-term spending and revenue into alignment. In 2010, Bowles and Simpson issued their plan and embarked on a media tour to sell it.
The Commission report recommended an ambitious package of spending cuts and tax code changes designed to reduce government expenditures, increase revenue, and gradually begin to reduce the deficit and pay down the debt. Their report included detailed recommendations to:
- Cap discretionary spending, including defense spending, for ten years, reduce agricultural subsidies, and eliminate all earmark spending;
- Contain health care costs by enacting a variety of changes to Medicare and Medicaid;
- Bring civil service and military retirement programs in line with private sector benefits;
- Change Social Security benefit formulas and increase early and full retirement age; and
- Amend the tax code to broaden the tax base, cut tax expenditures, and lower rates.
No one involved in creating it loved the entire plan, but many elected officials remember it as a rare example of both parties working together in earnest. If Congress wants to show that they mean business to the 80 percent of Americans who worry about Federal spending, they could start with the moderate Bowles-Simpson plan. We shouldn’t allow the perfect to be the enemy of the good, especially when there’s something good already on the table.
Published: August 14, 2017
To Learn More
The Campaign to Fix the Debt (an advocacy group led by Bowles and Simpson)
Why Won’t Americans Listen to Alan Simpson and Erskine Bowles? by Joshua Green (BloombergBusinessweek, February 28, 2013)