New Hampshire-based Americans for Campaign Reform had me up last Thursday to moderate rather interesting panel, “Solving our fiscal crisis: What’s wrong with Washington?” Six panelists took on an aspect of what’s wrong with Washington, but it was two knowledgeable gentlemen affiliated with the nonpartisan group No Labels who put the scope of the problem and its impact on the nation into perspective separately from a political and fiscal angle.
Former Rep. Mickey Edwards (R-Okla.) made the political diagnosis of what’s wrong with Washington. It was a riff on “How to turn Republicans and Democrats into Americans,.” his widely read piece in the July/August issue of The Atlantic. “I believe in free enterprise. I believe in the incentive system,” Edwards told the crowd at the New Hampshire Institute of Politics at Saint Anselm College in Manchester. “And in our political system today every single incentive is to not cooperate, to not compromise, to not sit down and talk to somebody who is on the other side of the political aisle who belongs to a different political club.”
David Walker, president and CEO of the Comeback America Initiative, was the seventh Comptroller General of the United States and the head of the Government Accountability Office from 1998 to 2008. He makes the fiscal diagnosis. “We are number 28 out of 34 nations in fiscal responsibility and sustainability. Down dramatically in the last 10 years and both political parties are responsible for it,” Walker said. “The last 10 plus years have been the most irresponsible in the history of the United States and both political parties are responsible for it.”
Below are their opening remarks at the ACR event. I transcribed them from my recording on my magic tablet and edited them a bit for clarity and continuity. They are worth the read because they speak the truth. What Edwards and Walker are saying is that time is of the essence. We can’t afford, politically or fiscally, to put off the tough decisions any longer. The solutions are there. All that’s required is leadership and political will to get it done. Both of which are the two things missing in Washington.
There is a degree of unhappiness, frustration and anger with the American political system today that has spread throughout the country. More than 40 percent of Americans today have rejected both political parties and are registered as Independent or unenrolled. California last year, Washington state in 2006, Louisiana before that got rid of party primaries, closed party primaries so that you did not continue to have the situation they had in Delaware last year. When the voters went to the polls, whichever side you would have been on, when the voters in Delaware, which has a million people, went to the polls in November, they could not vote for Mike Castle even if they wanted to because 30,000 people out of a state of 1 million had voted for someone else in a closed party primary.
I bring that out because I, it has taken me a long time to try to figure out why does our system not work? And what I realized is that our system DOES work. It is doing precisely what it is designed to do. It is built around two political parties that control access to the ballot in November, that control district lines, that control who sits on what committees in Congress. I believe in free enterprise. I believe in the incentive system. And in our political system today every single incentive is to not cooperate, to not compromise, to not sit down and talk to somebody who is on the other side of the political aisle who belongs to a different political club.
So we have the situation, for example, that when you have really critical issues....all the Republicans are on one side, all the Democrats are on the other and they are talking not about how you solve the negative problems, but how you win the next election.
So, we’re here and we’re frustrated because we keep changing people at the top. We go to the polls to take our country back. We went to take our country back in 2000 and 2004, 2006, 2008, 2010. Nothing changes. Why doesn’t it change? [It doesn’t change] because we’re locked into an outdated party system that George Washington, John Adams, Thomas Jefferson and James Madison all warned against. All said do not create political parties. And what we’ve done is not only create the parties, we have built our system around parties. Parties decide congressional districts. Parties put somebody on a committee in Congress if they have decided in advance that they will vote the party line rather than using their own brains, rather than obeying the Constitution, rather than listening to their constituents they will vote according to the party’s dictates.
And I don’t think we can survive much longer doing that. I have a favorite candidate for president this year. You all have a favorite candidate for president this year. It doesn’t matter. It doesn’t matter because whoever you elect is going to be locked in to this system in which other factors, whether it’s the people who contribute money to your campaign or what your party leadership wants you to do, are going to decide what the outcomes are going to be....
We want decisions made on the basis of what’s good for the country not what label you wear on your forehead....You as New Hampshire citizens and as Americans want choice in every single thing you do. You want choice in telephones, suit, soap, stereos, everything. Why do we allow these two private clubs to tell us who we are allowed to choose between when we go to the polls? We are not going to solve any of these problems until we break the ability of our political clubs to dictate to us in our political governance.
Let me speak candidly. America is at a critical crossroads. We have strayed from the principles and values that made us great. Limited but effective government. Individual liberty and opportunity.
Fiscal responsibility and inter-generational equity.We face a range of key sustainability challenges that literally threaten our future position in the world and our standard of living at home. Number one is the fact that our finances are in terrible shape and deteriorating so-called fiscal responsibility, or irresponsibility I would say. The simple fact of the matter is if you don’t have your finances in order your economy is not going to stay strong. And if your economy doesn’t stay strong then everything will else suffer over time.
The truth is we’re spending $1.40 for every $1 we take in. And if we had not raised the debt ceiling limit we would have had to cut 95 percent of all discretionary spending overnight. And discretionary spending includes all of the expressed and enumerated responsibilities envisioned by the Founding Fathers in the Constitution. All of them. Defense, Homeland Security, judicial system, executive office of the president, Congress of the United States, foreign policy, etc., etc..
We’re in a $62 trillion hole. That’s the total liability in unfunded promises for Medicare, Social Security and a range of others commitments and contingencies. Let me translate that to a number that you and I both can understand. That’s $200,000 per person, $530,000 per taxpayer. And it’s going up. The $62 trillion is going up by $2 trillion to $3 trillion a year even with a balanced budget. And we’re a long way away from that.
We are number 28 out of 34 nations in fiscal responsibility and sustainability, down dramatically in the last 10 years, and both political parties are responsible for it. The last 10 plus years have been the most irresponsible in the history of the United States and both political parties are responsible for it.
If we can show the first slide.
This is what our future looks like under the status quo, do nothing, gridlocked approach that Washington is under. The line represents revenues as percentage of the economy, assuming that we go back to historical levels of 18.2 - 18.4 percent of the economy. The bars represent spending. You can see how they grow over time. The imbalance that represents deficits, which turns into debt. The fastest growing expense? Interest on the federal debt. And what do you get for interest, as we say in the South? Shinola. Nuthin’.
Second fastest growing expense is health care. You cannot grow your way out. It would take double-digit real GDP growth for decades. You can’t inflate your way out because the real problem are the off-budget sheet obligations that grow faster than inflation and faster than the economy when the economy grows. You can’t tax your way out because you’d have to double federal taxes and that would stifle the economy and American won’t accept that. And you can’t cut your way out because you would have to decimate discretionary spending and the social safety net. So we gotta be honest with the American people because we’re going to have to make some tough decisions. And we better do it sooner rather than later because the simple truth is the United States is not exempt from the laws of prudent finance. A debt crisis can occur here within the next three years if we do not start making real progress.
Now, the problem is is that it’s not just a matter of what needs to be done. It’s how we’re gonna get it done. We need to reimpose tough budget controls. We need to reform Social Security, Medicare, Medicaid. Renegotiate health care promises. Reduce defense and other spending without compromising national security. Engage in comprehensive tax reform that will generate more revenues...We’ve got to do all of that. And we need to get started soon because it’s going to take us a number of years and we need to get the power of compounding starting to work for us.
But how are we going to get it done because we have a dysfunctional democracy? Our politics have been taken over by the wingnuts — on both ends. And they are dominated by career politicians who may or may not have had a real job in their life but once they get elected they don’t have one and they want to keep it for life. And so the fact is is that we’re going to need political reforms, too. We’re going to need redistricting reform. We’re going to need integrated, open primaries. We’re going to need campaign finance reform. And we’re going to need reasonable term limits, 12 to 18 year term limits. And we better do it sooner rather than later.
The good news is there is hope. Other countries have faced these challenges and they’ve met them. Australia, New Zealand, Canada, Sweden, just to name a few. If they can do it we can do it. But for us to do it, in closing, the first three words of the Constitution have to come alive: “We the People.”
We the people are responsible and accountable for what does or does not happen. And the simple fact of the matter is New Hampshire has a disproportionate opportunity and obligation to ask tough questions, to demand answers and to hold people accountable. Not just for what they do but, quite frankly, what they fail to do because today they are failing to act on large, known and growing problems. Thank you.
Correction, 6:45 p.m.: David Walker tells me my transcription of the historical levels of revenue to GDP was wrong. Instead of 18.9 percent, as was in the original post, it should be between 18.2 percent and 18.4 percent. This is now reflected in the text above.