It may have surprised some people when Standard & Poor's warned last month that the United States could lose its coveted status as the world's most secure economy if lawmakers don't rein in the nation's unsustainable debt. I have been sounding a similar alarm for almost five years, trying to get the attention of Congress and past and present administrations that America cannot continue on its debt and deficit track (currently more than $14 trillion of debt, $62 trillion-plus in unfunded liabilities, and more than $1 trillion in annual deficits projected for years to come).
In pushing for the creation of an independent bipartisan panel to address unsustainable federal spending, I spoke in the House of Representatives in January 2008 about a Financial Times article headlined "U.S.' s Triple-A Credit Rating 'Under Threat.'" Already, the Moody's rating agency was warning that "the U.S. is at risk of losing its top-notch triple-A credit rating within a decade unless it takes radical action to curb soaring health care and Social Security spending."
My idea was for a Securing America's Future Economy (SAFE) Commission to spend a year holding public forums in the country's nine Federal Reserve districts, listening to and learning the priorities of Americans, and educating the public about the financial tsunami that threatens to engulf our nation. Its recommendations would be sent to Congress in a legislative package designed to right the fiscal ship of state. The keys to SAFE were mandates for an up-or-down vote — similar to the process for closing military bases — and for everything to be on the table: entitlements or mandatory spending; discretionary or all other program spending, including defense; and tax policy. No sacred cows would be fenced off.
While this proposal never made it to the House floor, a similar plan pushed by then-Sen. Judd Gregg, R-N.H., and Sen. Kent Conrad, D-N.D., did get a vote (and a disappointing defeat). The Gregg-Conrad legislation received new life last year as the blueprint for the president's National Commission on Fiscal Responsibility and Reform, commonly known as the Bowles-Simpson commission. While I had some doubts about the parameters of that panel, especially the requirement that 14 of the 18 members vote to send its report to Congress, I remained hopeful that at last the nation's growing debt load would be addressed.
As we all know, Bowles-Simpson was unable to overcome the supermajority hurdle. Yet its report garnered 11 votes from members across the political spectrum. Bowles-Simpson gave us hope that by working together, we can come up with a bipartisan plan. Given the opportunity, with a few changes, I would vote for the Bowles-Simpson outline.
I applaud the "gang of six" — Sens. Saxby Chambliss, Mark Warner, Tom Coburn, Dick Durbin, Mike Crapo and Conrad, chairman of the Senate Budget Committee — for taking up the mantle to put the Bowles-Simpson concept into a legislative plan. They recognize that addressing the debt and the deficit isn't a simple exercise in rooting out waste, fraud and abuse; eliminating earmarks; and reining in discretionary spending. To be sure, those are important reforms, but alone they won't come close to solving the crisis. The senators agree that, like the SAFE process envisioned, and as painful as it may be, everything — including what I call tax earmarks for companies and other special interests — must be on the table.
It is disappointing that some have attacked these senators for daring to engage in a discussion that has tax reform as an option. Americans for Tax Reform, led by Grover Norquist, has engaged in bullying tactics designed specifically to stop Coburn's call for eliminating the ethanol subsidy. The tax code will never be overhauled if any attempt to eliminate a tax expenditure — spending through the tax code — is equated with a tax increase.
Look, too, at the $14.2 billion in profits posted by General Electric, of which $5.1 billion came from operations within the United States. Not only did GE pay no federal taxes, it also claimed a tax benefit of $3.2 billion, initially designed as short-term tax breaks to spur economic growth. Once a tax cut is enacted, it is nearly impossible to eliminate (see the ethanol subsidy). If these are not examples of why everything must be included in our budget discussions, I don't know what is.
This discussion also demands presidential leadership. Before his speech at George Washington University last month, the president barely acknowledged the work of his own deficit commission. I was disappointed that he failed to offer specific solutions and seemed more interested in staking out political positions than finding common ground. He cannot continue to bob and weave as the financial storm closes in.
This is an American issue, not a Republican or Democratic one. We have been warned. There is never an easy time to make hard decisions, but the economic reality is that the financial markets could soon dictate drastic options if we don't have the fortitude to look at everything and agree on a plan to ensure a prosperous future for our children and grandchildren.