The four chairmen that headed two previous panels examining deficit reduction warned the Joint Select Committee on Deficit Reduction of the consequences of failing to reach a bipartisan deal that saves at least $1.5 trillion over the next decade.
Pete Domenici, Alan Simpson, Alice Rivlin and Erskine Bowles testified today before the so-called super committee to explain their previous attempts at reducing the deficit, and encouraged the exclusive committee to reach for a grand bargain slicing about $4 trillion from the federal deficit.
Bowles, who along with Simpson was co-chair of President Obama’s National Commission on Fiscal Responsibility and Reform, said he believed “the American people will support [the committee] if you make these big, bold, smart decisions.”
“Collectively, I’m worried you’re going to fail – fail the country,” Bowles, who also served as chief of staff to former President Bill Clinton, warned. “Our commission came up with a balanced plan of $4 trillion in deficit reduction over the next decade. We didn’t make the $4 trillion number up because the No. 4 bus rode down the street. $4 trillion is not the maximum amount we need to reduce the deficit. It’s not the ideal amount. It is the minimum amount we need to reduce the deficit in order to stabilize the debt.”
Rivlin, who previously served as director of the Congressional Budget Office and director of Office of Management and Budget under Clinton, agreed that the committee “should craft a grand bargain involving structural entitlement and tax reform that would save at least $4 trillion over ten years.”
“We fully appreciate the difficulty of the choices facing this committee and hope you have the courage to restore fiscal responsibility and avoid the truly dire consequences of partisan gridlock,” Rivlin testified. “One of the best things we could do for the growth of the economy right now is for this committee to legislate long-run reduction in the deficit on the entitlement and tax side right now. We can’t wait until after 2013 or some other time to do that.”
Domenici, who along with Rivlin co-chaired the Debt Reduction Task Force, said that both political parties are “equally complicit” in the standoff that has brought the country to its knees and he warned that “our fiscal ship is destined to sink” if the bipartisan committee does not produce a plan to fundamentally restructure health care entitlements like Medicare along with revenue increases.
“With spending projected to grow faster than revenues, we will be forced to borrow more and more every year if we do not change our policies. This fiscal projection is clearly unsustainable,” Dominici, a former Republican senator from New Mexico, said. “We are an America with an unsustainable economic policy and it will ruin us sooner or later.”
But with Congressional Republicans staunchly opposed to new tax revenues, Simpson, a former Republican senator from Wyoming, questioned why Grover Norquist of the Americans for Tax Reform chooses not to run for president himself since he has compelled most Republicans to sign a pledge to vote against tax increases.
“If Grover Norquist is now the most powerful man in America, he should run for president,” Simpson said. “There’s no question about his power, and let me tell you, he has people in thrall. That’s a terrible phrase. Lincoln used it. It means your mind has been captured. You’re in bondage with a soul.”
Simpson said that with “a $1.1 trillion stack of stuff called tax expenditures,” idling at the negotiating table, it’s misleading to consider closing loopholes as a tax increase.
“To call that a tax increase is a terminological inexactitude. It would be called a lie, in other words,” Simpson said. “So we said we’re not going to get into that business of tax increase so that Grover won’t have a stroke over in his shop. We’re just going to go around Grover and let Grover rant, because I’ll tell you one thing: If he and the AARP, if we are in thrall to those two groups, we haven’t got a prayer, and neither have you.”
The committee is expected to produce a framework for a deal prior to its Nov. 23 deadline in order for the Congressional Budget Office to score the proposal. The panel must produce a plan approved by a simple majority of the 12-member panel and the full Congress has until Dec. 23 to pass it into law.