ALAN SIMPSON AND ERSKINE BOWLES
Co-chairs of the National Commission on Fiscal Responsibility and Reform
We can’t stress enough how important it is that Congress has agreed on a deal to increase the debt limit. Allowing our country to default would be the worst possible policy.
The cuts called for in this plan are significant and represent the first step along the path of real fiscal reform and responsibility. The problem with this plan is that it isn’t a solution, it is merely a first step and no one should regard it as more than that. The nation’s debt will continue to rise as a share of the economy. There is no requirement that the special committee recommend structural changes to entitlements or tax reform. And the trigger mechanism designed to force action exempts too much and requires too little.
On the commission, we showed that there is strong support for a comprehensive plan that puts everything on the table and sets our nation on a sound fiscal footing for the long term. That support was reaffirmed by the positive reaction to the work of the Senate Gang of Six. If the new committee builds on the work of the Gang of Six, its members can reach a principled agreement on a serious, comprehensive fiscal plan. If they don’t, they probably won’t.
If there is one lesson from our commission’s work that should stand as the best guide for the work of the new committee, it is this: The more we put on the table, and the bigger, more far-reaching and more comprehensive we made our plan, the more support we received from our members. The only way politicians can make painful choices is if they know the other side is making painful choices as well and if they know they are solving the whole problem at once, so they don’t have to come back and do it all again.
There is a reason we named our final report “The Moment of Truth.” It’s time to go big or go home.
LEONARD E. BURMAN
Daniel Patrick Moynihan professor of public affairs at Syracuse University
It could have been worse. Assuming Congress approves the compromise, we won’t default on our debt or other legally binding obligations. The president will not cut spending overnight by 40 percent (as would be required if further borrowing is precluded). So we avoid outright disaster.
But the deal Washington has patched together is no policy triumph. The nation faces two big challenges: In the short term, the economy is still extremely fragile. Unemployment remains over 9 percent, and growth is more anemic than previously thought. Rational fiscal policy would focus on reducing unemployment and getting the economy back on track.
Over the long term, the combination of an aging population, soaring health-care costs and tax revenue at its lowest level since World War II threaten to bankrupt the nation.
This debt deal will exacerbate our short-term economic problems by cutting spending starting this fall and by increasing amounts over the next decade. Cutting spending in the midst of a recession, especially when the Fed can’t or won’t do more to spur the economy, is simply bad economic policy.
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