Boy, that sequester thingie is pretty scary! Obama even had to surround himself with policemen, fire fighters, and other first-responders just to talk about it.
Okay, so that’s how ham-handed grandstanders handle crises. (Why not show the middle-management government hacks, btw, with their bulging waistlines and too-short ties making $125,000? They’re not as photogenic, but they’re much more illustrative of the crisis.)
Erskine Bowles and Alan Simpson are co-chairs of the Moment of Truth project and formerly co-chaired the President’s bipartisan National Commission on Fiscal Responsibility and Reform.
The United States faces two big risks to its economic prosperity, but both are avoidable. In the near-term, a still fragile recovery is struggling to take hold. Over the medium and long-term, our debt is projected to continue growing faster than the economy. It is simply on an unsustainable path.
There is no perfect solution to our fiscal problems. However, we believe strongly and sincerely that an agreement on a comprehensive plan to bring our debt under control is possible if both sides are able to put their sacred cows on the table in the spirit of principled compromise. We understand that there will be disagreements among policymakers and experts about the exact approach and specific policies necessary to achieve deficit reduction, and we welcome their commentary. In our view, a reasonable debt reduction plan should at least do the following:
Promote, Don’t Disrupt, Economic Growth. The United States must pursue a growth agenda. As the economy recovers, one of the best ways to promote economic growth is to bring our debt under control, which will both encourage private investment and mitigate the risk of a fiscal crisis.
At the same time, tax and spending reforms should be designed to strengthen current economic conditions, promote work, encourage innovation, improve productivity, and bolster investment in our future.
Put the Debt on a Clear Downward Path Relative to the Economy. Debt held by the public currently stands at 73 percent of GDP, about twice the historical average. We need to gradually reduce our debt relative to our economy. To be credible for the long-term, we believe that the debt must be brought to below 70 percent of GDP by early next decade, and kept on a downward trajectory thereafter.
Reform the Tax Code in a Progressive and Pro-Growth Manner. The current tax code is complicated, confusing, costly, anti-growth, anti-competitive, unfair, and riddled with well over $1 trillion of tax expenditures – which really are just spending by another name. Tax reform must reduce the size and number of tax expenditures to reduce the budget deficit and lower marginal tax rates for individuals and corporations. At the same time, tax reforms must maintain or improve the progressivity in the tax code and promote economic growth. Tax reform will make the tax code more efficient, effective, and globally competitive.
Get Serious About Population Aging. America is getting older, and the aging of the population represents a significant driver of our growing debt. We need to modernize our tax and entitlement programs to account for this demographic shift and encourage work and savings.
Significant spending cuts, pro-growth (and simplified!) tax policies, entitlement reform—with all due respect to the authors, we just held an election and rejected that approach in favor one that soaks and demonizes the rich, rejects growth, and only expands entitlements. What are they, racists?
Obama is a master of imaging and messaging. Want to talk about health care? Get a gaggle of doctors to stand behind him (and give white lab coats to the ones who didn’t bring theirs). Want to talk about gun control? Suffer the little children to come unto and surround him. Now he wants to act the demagogue (in an Oscar winning performance) on the issue of the budget, so he surrounds himself with cops and fire fighters. As Buck once noted, Obama’s may be the most transparent administration ever, just not in the way he meant.
I just give thanks that Obama doesn’t insert himself into a discussion of sewage treatment. That would not be a pretty photo op!