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Monday, January 31, 2000

Former Massachusetts senator Paul Tsongas defeated Bill Clinton in New Hampshire's Democratic primary in 1992 with a message about balancing the federal budget. Later that year, after losing his party's nomination to Clinton, Tsongas joined forces with former New Hampshire senator Warren Rudman (R) and former U.S. Secretary of Commerce Peter Peterson to establish the Concord Coalition, a national nonpartisan organization that mobilizes grassroots support for fiscally responsible federal budget policy.

What is the Concord Coalition up to now, as Democrats and Republicans debate what to do with the first budget surpluses in a generation? Concord Coalition Executive Director Robert Bixby joined "Free Media" live Monday, Jan. 31, to discuss his organization's agenda.

Free Media: Good afternoon, Mr. Bixby, and welcome.

Could you give us a brief overview of your organization, and tell us what issues the Concord Coalition is currently addressing?

Robert Bixby: The Concord Coalition is a nonpartisan fiscal watchdog group founded by the late Paul Tsongas and Warren Rudman and Peter Peterson. We are a nationwide grassroots organization and the mission is really to promote fiscal responsibility at through grassroots action.

We are working now on three main issues. The federal budget and the long-term future of Social Security and Medicare.

Since the organization started, recently we've taken the emphasis on how to save the surplus rather than how to eliminate the deficit. Since Sen. Tsongas's death Former Senator Sam Nunn.

Richmond, Va.: How are members of your group chosen, and what types of endorsements will you make?

Robert Bixby: Well, I am not sure what the first part means. Members of the Concord Coalition join the Concord Coalition. They find us. We do not endorse political candidates. We are more focused on public education. We don't give money to candidates or take money from candidates. We don't view our mission as telling people who to vote for, but rather that the issues we care about are addressed by all the candidates.

Free Media: Has the Concord Coalition done an assessment of the various tax-cutting plans the presidential candidates are offering?

Robert Bixby: The Concord Coalition does not favor a tax cut at this time. So we would not say that one tax cut plan is better than another one. We think the best thing to do with the budget surplus is first make sure it exists and second, if it does exist to the extent which surpluses come about, it should be used to reduce the national debt.

Benthatchet, Utah: Wow! A surplus! I never thought I would see one in my lifetime. I know it's important to get our fiscal house in order for the long-term. But the endeavors we could undertake with the surplus money, such as our space exploration program, could use a shot in the arm. So could a variety of medical research fields. Does living a "fiscally responsible" life mean we have to pursue austerity as a society? Where do scientific and intellectual endeavors fit into that vision?

Robert Bixby: A very good question. The Concord Coalition has always believed that as a nation, we should make investments in critical areas. Certainly, space exploration is one area which can produce benefits here on earth that are worth paying for. Fiscally responsible does not necessarily mean austerity -- particularly in good times. But, it does mean that we should be willing to pay for those investments we choose to make without passing the burden on to future generations through deficit spending.

Free Media: What is the Concord Coalition's position on the proposals President Clinton outlined in last week's State of the Union address?

Robert Bixby: We will no more when we see the president's budget on Feb. 7th, when he submits his budget these proposals will have price tags attached to them. Right now the total cost is a little vague. Essentially we support the president's view that debt reduction should be a high priority for the surplus. We also support his view that a prescription drug benefit should be added to Medicare. But we are very concerned about adding a new benefit which would be very expensive without identifying an adequate source of spending. We do not believe that simply relying on projected budget surpluses is a reliable source of funding.

We also have some concern about the president's Social Security proposal. We believe that the long-term future of Social Security requires structural changes, rather than simply devoting more general revenues to the program in future years which is essentially what the president has proposed. The key issue in Social Security reform is not whether the trust fund is solvent for a period of years, but whether the long-term cash balance is sustainable.
The president's proposal does not address the long-term cash imbalance, but simply focuses on trust fund solvency, a measure which is easily manipulated.

Washington, D.C.: I noticed that Sen. Rudman was one of your founding members. What ever happened to the Gramm-Rudman act? We heard a lot about it in the 80's, but virtually nothing since then. Is the government still required to cut spending across the board if it can't reach a budget agreement?

Robert Bixby: The Gramm-Rudman Act was superceded by the 1990 budget agreement negotiated between President Bush and the Democratic Congress. While it was in place it did succeed in holding down non-entitlement government spending. However it did not apply to entitlement spending so total spending continued to go up. The 1990 agreement extended the Gramm-Rudman-Hollings concept that spending would be cut across the board if it exceeds a specified target. The 1997 budget agreement also contains this provision. Unfortunately, Congress has ways of getting around spending limits. For example anything they declare to be an emergency doesn't count under the cap. So, spending as continued to go up even with this seemingly tough enforcement mechanism.

Orono, Maine: I've heard a lot of buzz about using the budget surplus to prop up Social Security and Medicare. What I haven't heard, however, is much debate about how the surplus could be used to help young people -- particularly young working families. Young families have shouldered more than our fair share of the burden for the budget mismanagement of the last decade, and we have very little to show for it.

Robert Bixby: A very interesting question. Properly designed, the budget's Social Security and Medicare reform will benefit young people the most. On their current course these programs are not fiscally sustainable and working age people in the future will end up with a much higher tax burden than today's working age people have if we don't rein in the long-term costs of these programs. The Concord Coalition does not believe that we should use the surplus simply to throw money at Social Security and Medicare as they are now structured. That does not help the long-term problems. We believe that Social Security and Medicare Reform are really about young people rather than old people. Both programs are in pretty good shape for today's elderly. We must be thinking about the future.
As for our discretionary budget it is true that the federal government spends about 9 times more on the elderly than it does on children. We have always thought that this imbalance should be addressed. Although, given healthcare costs, the government will always spend more on the elderly than on children.

Fort Myers, Fla.: I would like to know what purpose your group serves. Politicians don't pay attention to the average citizen. What can you do to change that?

Robert Bixby: Politicians pay more attention to the average citizen than you may think. Groups like the Concord Coalition which have members around the country and are not just Washington think tanks help politicians to recognize that constituents are truly interested and knowledgeable about issues.

Our effectiveness comes from the fact that politicians know we have members in their district and so when I speak to members of Congress they know that there are Concord Coalition members who pay attention to these issues and they vote.

Free Media: Even though you stated that the Coalition does not endorse political candidates, does your group make public assessments of political proposals that may raise concern among your group or other groups focused on fiscal responsibility?

Robert Bixby: Yes we do. We often speak out on legislative proposals in Congress or by the president. For example, last year we opposed the president's Social Security reform plan because we did not think it amounted to real reform. We also opposed the Republican tax cut bill because we thought it was too reliant on projected budget surpluses and could lead to renewed deficits.

Free Media: George W. Bush wants to use surplus money for a tax cut, Bill Bradley wants to use surplus money for health care, and so on and so on. Do you feel it is sound for the presidential candidates to base their policy proposals on projected funds?

Robert Bixby: We have put out a brochure which is on the Concord Coalition Web site called "Key Questions Voters Should Ask Candidates." One of those questions is essentially the one you just asked. We do not think that large, new spending commitments or tax cuts should be enacted based on projected budget surpluses.

The existence and size of projected surpluses, particularly over a long period is far too speculative to serve as a sound means of financing such major commitments. So we have asked candidates, "How would you finance your proposals if the surpluses fail to materialize?"

Ft. Wayne, Ind.: It seems to me the best way to save Social Security is to make it truly democratic. Currently, those who make more than a certain amount -- I've heard both $69,000 and $74,000 -- do not pay into the system; in other words, they get a tax exemption. Shouldn't we make all people pay to support the preceding generation?

Robert Bixby: People earning more than 76,200 do not pay a payroll tax over that amount. They do pay a payroll tax up to that amount. It's not as if they are exempt. If we took the cap off the payroll tax so that it applies to all wages, no matter how high, that would bring more money into the system.
However, a lot of that new money would simply go out in the form of benefits to upper income people. The reason for this is that the Social Security benefits are linked to wages so that if you pay taxes on more of your wages, you will be earning higher benefits. The Concord Coalition has never believed that we should be paying higher benefits to upper income people. Some have suggested that we could tax upper income people more and not pay it back to them in the form of higher benefits, but that would run counter to Social Security's historic concern with linking contributions to benefits. Finally, if we subjected all wages to Social Security taxation, many upper-income people would probably choose to take their income in some form other than wages. In the end, this is not the solution to Social Security's long-term problems.

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