Denver panel looks at ways to reduce nation’s debt and deficit

Budget impasse keeps sponsors in D.C.
The Colorado Statesman

Colorado’s two U.S. senators convened a discussion in Denver on April 8 about reducing the nation’s debt and deficit but were unable to attend because of one of the very roadblocks fingered by the forum’s participants — partisan wrangling.

“I can’t get over the irony that we find ourselves stuck in Washington while we’re supposed to be having a conversation — a thoughtful conversation — about the fiscal condition of this country,” said Sen. Michael Bennet over a Skype video-chat connection with a packed conference room at the University of Colorado Denver.

Former U.S. Sens. Alan Simpson, R-Wyoming, left, and Gary Hart, D-Colorado, prepare to lead a forum on the federal deficit on April 8 in a University of Colorado Denver conference room.
Photo by Ernest Luning/The Colorado Statesman

Bennet welcomed forum participants Alice Rivlin, former director of the Office of Management and Budget, and two former U.S. senators, Gary Hart of Colorado and Alan Simpson of Wyoming. All three have recently served on debt-and-deficit reduction commissions — some formal, some less so — and were in general agreement on how to solve the problem: Put everything on the table, including broad spending cuts and serious tax increases, and put the national interest ahead of individual political careers and the demands of various powerful interest groups.

“I think we can lay a new fiscal foundation, if you will, that focuses on the medium and the long term,” added Sen. Mark Udall over the remote video connection. “However, if we don’t grab this opportunity, then the consequences are especially dire.”

Bennet said the much-derided report issued in December by the National Commission on Fiscal Responsibility, co-chaired by Simpson, provided a framework to kick off the discussion. He applauded the fact that far-right U.S. Sen. Tom Coburn of Oklahoma and far-left U.S. Sen. Dick Durbin of Illinois both agreed on the commission’s recommendations and said that boded well for an eventual bipartisan solution.

“I may not agree with every single thing that’s in there, but as a starting point to move this conversation forward, that’s good enough for me,” Bennet said.

The two Democrats spoke briefly to the roughly 200 politicians, academics, business representatives, military leaders and members of the public gathered for their Common Sense Forum on the Nation’s Debt and Deficit Crisis. Then they disappeared from the giant video screen — the Capitol studio had others waiting — to listen to the proceedings and send in comments to participants’ Blackberries while keeping tabs on congressional negotiations to avert a government shutdown.

Rivlin — who sat on the commission chaired by Simpson and Democrat Erskine Bowles and another recent debt-reduction panel along with former U.S. Sen. Pete Domenici of New Mexico — said forums like the one in Denver are the best hope to tackle the crisis. “It is possible for a group of people with very divergent views to sit around the table and come up with something that is nobody’s first choice and that will solve the problem,” she said.

U.S. Sens. Mark Udall and Michael Bennet address a Denver forum on the federal deficit from Washington, D.C., via Skype video conferencing on April 8. The two Colorado Democrats were unable to attend the forum they sponsored because of ongoing negotiations over the federal budget.
Photo by Ernest Luning/The Colorado Statesman

Rivlin said that the other lesson she’s learned is, “You have to do everything.” Federal spending, she said, is “on a track to grow faster than the economy, and that’s an unsustainable situation,” made worse by the pending retirement and geriatric health woes of a “huge tsunami of Baby Boomers.” But spending cuts alone won’t come close to solving the problem. She added that the nation’s “terrible tax system” left plenty of room to fix things.

“Nobody likes to do any of those things, but a group of people can get together, figure it out and try to come up with something, and that’s what we need to do,” she said.

Simpson pointed to the same set of solutions but joked that putting them down on paper had put a target on his back.

“I feel I have achieved a remarkable success, because at this stage of life I have achieved a goal: I have effectively pissed off everybody in the United States,” he said, referring to the backlash from across the political spectrum to the Simpson-Bowles commission’s report.

Everyone has an ox that gets gored, Simpson suggested, but that’s the only way to approach a balanced budget. While the report’s heaviest critics have been interest groups alarmed by proposed spending cuts — including the American Association of Retired Persons, a lobbying group Simpson termed “38 million people bound together by a common love of airline discounts” — Simpson argued as vigorously for tax increases to help balance the budget.

Simpson said he confronted anti-tax crusader Grover Norquist when the commission met and they exchanged words over the legacy of Ronald Reagan, claimed by both as their personal hero. When Reagan was president, he raised taxes 11 times, Simpson said, a bit of history that made Norquist squirm.

“I knew Ronald Reagan and you, Grover, are no Ronald Reagan,” Simpson said he told the president of Americans for Tax Reform, who famously said his goal was to make government small enough it could be drowned in a bathtub. Reagan didn’t raise taxes to give Norquist something to complain about, Simpson said. “He probably did it to make the country run.”

“We’ve never had a war with no tax to support it, including the Revolution,” Simpson said, after pointing out that taxes account for an increasingly smaller share of the economy. But the harsh partisan atmosphere in Washington makes any discussion of tax increases dangerous, Simpson said. “People are told in Congress if they raise taxes by a nickel, they’ll be strung up by their heels in the town square.”

Hart echoed Simpson’s conclusion that harsh partisanship was making it more difficult to talk about any solutions — spending cuts or tax increases — aimed at reducing the deficit.

“Part of the problem is the erosion of good faith in the Congress,” he said. “We’re not going to solve the problem with the atmosphere and the mood there is in Washington today.” Because Democrats and Republicans alike are increasingly beholden to their party’s most extreme elements, he said politicians can’t come together. “If you don’t do what the base tells you to do,” he said, “you are facing a primary in the next election.”

Still, Hart said, if the federal government is ever going to get serious about taking on the national debt, it’s going to have to take into account what he termed “five key components: Social Security, Medicare, Medicaid, defense and revenues. You have to do all those things,” he said, because there’s just not enough meat elsewhere in the budget.

That’s the key, said forum moderator Maya MacGuineas, president of the Committee for a Responsible Federal Budget and director of the fiscal policy program at the New America Foundation. The more elements of the federal budget up for discussion, the more people with opposing viewpoints will sit at the table, she said.

“Nobody wants to leave that room if they feel like they’re the only ones sacrificing,” but if they feel the deal is fair, they’ll buy into it, she said.

Simpson said Democrats and Republicans are playing a dangerous game of chicken over the budget. “Both sides are terrified that if they utter anything, they’ll be torn to bits by the other side,” he said.

Responding to questions from the audience, panelists dove into some specifics but mainly repeated the mantra that everyone has to sacrifice and that no one will be entirely happy.

“Ladies and gentlemen,” Simpson said, “you can’t bring home anymore bacon because the pig is dead.”

Asked by a UCD student how Congress can balance the budget without harming higher education funding, Rivlin said it wouldn’t be easy.

“That’s a question that could be put about almost anything that good people care about,” she said. “The answer to that is, very carefully, but we’ve got to spread it around.” The danger with exempting anyone’s favorite slice of the budget, she said, is that after everyone plants a flag, there’s nothing left to cut. And once that happens, she said, basic arithmetic will threaten all the sacred cows anyway. “All those things will be squeezed out by the things that are on automatic pilot. What will get squeezed is the discretionary budget.”

Noting that he recently participated in an informal deficit-reduction forum that yielded a federal budget surplus within a few years, Hart said, “Well, the question is going to be, how come, if we can do this in three days, how come Congress can’t do this in three months or six months?” The answer, he said, “is that outside this room, there’s not an army of lobbyists and not one of us is seeking reelection.”