Fiscal challenge needs bipartisanship
This article was written by CCLP Senior Fellow Dan Glickman and co-authored by Frank Keating. The original article can be found at TheHill.com.
America is facing two enormous challenges that can only be overcome if both political parties work together: (1) creating new jobs and (2) stabilizing the soaring federal debt.
These are not Democratic or Republican issues -- they are American issues that require both political parties to set aside their differences and work together, in a patriotic spirit, as we have always done when our nation is at risk.
The persistent high unemployment and skyrocketing debt we face is a "silent killer" -- the economic equivalent of a war that threatens our nation and our children and grandchildren's future.
As a starting point, consider the Bipartisan Policy Center's Debt Reduction Task Force, which issued a bold, bipartisan plan in early November to (1) create up to 7 million jobs over two years by suspending Social Security payroll taxes in 2011 and (2) address soaring federal deficits and debt over the long term.
Our 19-member Task Force, chaired by former Senate Budget Committee Chairman Pete Domenici and former OMB and CBO Director Alice Rivlin, includes Robert Bixby, Gov. James Blanchard, Sheila Burke, Dr. Leonard Burman, Robert Campbell III, Secretary Henry Cisneros, Secretary Carlos Gutierrez, Bill Hoagland, Karen Kerrigan, Maya MacGuineas, Dr. Donald Marron, Ed McElroy, Dr. Joseph Minarik, Mayor Marc Morial, Bill Novelli, and Mayor Anthony Williams.
Despite their differences, our task force members understood something that we urge the nation's leaders to recognize -- our fiscal challenges are too big and too important for ideologically driven approaches. There are no easy answers.
Stabilizing the debt simply by cutting domestic discretionary programs would require eliminating nearly all such spending: veterans' healthcare, homeland security and law enforcement, education and student aid, roads and bridges, food and drug inspection, and so on.
Taxes are also not a simple answer. Reducing deficits to manageable levels through tax increases on the most well-to-do Americans would require raising the top two tax rates to 86 percent and 91 percent (from the current 33 and 35 percent).
Nor can policymakers rely on a strong economy to "grow our way out of the deficit." Just to stabilize the debt at 60 percent of gross domestic product (GDP), the economy would have to grow at a sustained rate of more than 6 percent per year for at least the next 10 years -- and it has never grown by more than 4.4 percent in any decade since World War II.
Instead, our task force adopted a posture of "shared sacrifice" in which we scoured every part of the budget, on both the spending and tax sides, for savings. We did not exempt anything from scrutiny.
It was that open-mindedness, along with a bipartisan spirit, that enabled the task force to aim high and achieve so much.
We developed a plan that would reduce the debt to below 60 percent of GDP (an internationally recognized standard), reduce annual deficits to economically manageable levels and balance the "primary budget" (everything other than interest payments) by 2014.
In the same spirit of bipartisanship, in addition to the payroll tax holiday, we found agreement to dramatically simplify the tax code and boost U.S. competitiveness with lower individual and corporate tax rates while also establishing a 6.5 percent debt reduction sales tax; fix Social Security so it can pay benefits for the next 75 years and beyond; control healthcare costs for families, businesses and government; freeze defense and domestic discretionary spending to force elimination of ineffective programs and prioritization of resources; cut other mandatory programs including farm subsidies and federal retirement programs; and protect our savings through strict budget enforcement rules.
This bold package required significant compromise, and not every task force member supports every element of the plan. But, particularly when it comes to our huge fiscal challenge -- the American debt -- progress requires a spirit of compromise.
We hope that our plan and, even more importantly, the bipartisan posture and patriotism that our members adopted in putting it together, will set an example for the current generation of leaders on whose shoulders our economic future rests.
Dan Glickman is a senior fellow of the Center on Communication Leadership & Policy, and is a senior fellow at the Bipartisan Policy Center. He is the former chairman and CEO of the Motion Picture Association of America and a former senator representing the state of Kansas.