“$4 Trillion or Bust — Even If It Takes Us Two Tries”

Lynn Woolsey continues her fruitless finger-pointing at Republicans regarding the debt ceiling process. Her latest remark: “…it is ‘time for the Republican majority to grow up and support a long-term debt ceiling increase that protects Social Security, Medicare and Medicaid.’ ” She has never understood how these are structured and the very real need to reform them in order to keep them functioning. She also looks at our federal fiscal situation as simply a gravy train that should, in her view, continue indefinitely to increase payouts. That is the reason she has said several times that she supports a debt ceiling increase (see, for example, this previous post of mine). Note that she doesn’t couple that insistence on raising the debt ceiling with any cuts in spending. She has no understanding of the real value of money.

Unlike our congresswoman, The Committee for a Responsible Federal Budget does know the dangers to our country if we just raise the debt ceiling, period. On July 25, 2011, this organization released a paper entitled, “$4 Trillion of Bust — Even If It Takes Us Two Tries.” The president of The Committee for a Responsible Federal Budget, Maya MacGuineas stated,

“We’re down to the wire, so it is reasonable for lawmakers to focus on a two-part approach which raises the debt ceiling and enacts a down payment on deficit reduction, while putting in place a credible process to achieve additional savings…”

The paper recommends:

Enact a strong down payment. 

 While agreement on the larger reforms necessary to achieve significant savings may not be possible in the time available to reach an agreement, lawmakers should include as much in savings as possible in the down payment.

Focus on debt to avoid gimmicks.
 
The ultimate goal of a fiscal plan must be to stabilize and reduce our debt as a percentage of the economy. Baseline gimmicks can artificially inflate savings, so policymakers should set explicit debt targets to ensure any deal is achieving its mission. Any plan that falls short of stabilizing the debt as a percentage of GDP — no matter how big it is described in terms of savings– would not be enough to get the job done. The Peterson-Pew Commission on Budget Reform has recommended a debt of 60 percent of GDP level by the end of the decade.
 
Keep everything on the table.
 
In order to be credible a process to achieve further savings, it must be accompanied by an explicit commitment by both parties to keep all options on the table for potential savings. The work of the Gang of Six, the Bowles-Simpson Fiscal Commission, and other bipartisan efforts to reduce the deficit have demonstrated that reaching agreement on a serious long-term fiscal plan will require tackling tough choices in all parts of the budget, including healthcare, Social Security, and revenues. If any areas of the budget are placed off limits for further savings, the process will justifiably be viewed as a recipe for gridlock and inaction.
 
Enforcement, Enforcement, Enforcement.
 
Any deal will require a mechanism to ensure future savings targets are achieved, and any two-part deal will require a way to ensure the second part is actually enacted. An enforcement mechanism must require both parties to “have skin in the game” to provide an incentive for negotiators to reach an agreement on a plan. CRFB has advocated across-the-board spending and tax expenditures cuts (or a tax surcharge) to be automatically triggered if debt stabilization goals are not projected to be met. We also support a short-term increase in the debt ceiling to ensure promised savings are realized.

 

These are measured recommendations that avoid partisan accusations. Note too that the text says that healthcare and Social Security cannot be held exempt from this process.

This approach does not include discussion of the balanced budget amendment, which I support, but that aside, it does represent balanced advice for the politicians. It would be immensely helpful if our congresswoman could also join in the process from constructive and realistic standpoint. I suggest she and her staff read this paper and try to adopt some of its recommendations.

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About district6voter

A concerned Northern California citizen who believes Representative Lynn Woolsey ought to be replaced in November, 2010.
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