Opinion: Now or never on debt issue

After an August in the countryside or their states or somewhere around the world or Martha’s Vineyard, the president and the Congress are back in Washington. 

ADVERTISEMENT
One hopes they are ready to govern -— because this period from now until the end of the year may be the last legitimate opportunity to do just that before the next election cycle begins in earnest.

The debate about Syria is on the center of the global stage but there is really only one domestic issue that needs to be addressed in this period: the budget and the debt.

With both the end of the fiscal year occurring and the debt ceiling needing reauthorization, it is difficult to comprehend how the issues that underlie and drive both of these events would not be taken up with fervor and a real intent to get something done.

At the center of these issues is of course the fact that we continue on the path of piling up an unfathomable amount of spending that is not paid for. The expenditure is made possible only through borrowing and passing the bills on down the line.

It is true the deficit has dropped a great deal in the last six months. It is also true that the sequester, if allowed to continue to operate, will cut that deficit even further. But no great solace should be taken from either fact, even though certainly on their faces they represent positive movement.

The fact that the deficit is down by over half from its high point is like saying that a person who has fallen off a tall building is doing “OK” when they are only halfway down.

The deficits at their present level still remain the highest in the post-World War II period. At the present rate of compounding, our debt will have tripled by the end of the decade from where it stood at the start of the Obama presidency. Our debt as a percentage of GDP will still be going up at what is generally accepted to be a bankruptcy-in-waiting rate.

Another positive sign of fiscal restraint on its face is the fact that the sequester is continuing to be executed. During the next fiscal year, which starts in October, it will begin to significantly affect domestic discretionary spending. But, it has to also be obvious that this is not the right way to get our fiscal house in order.

The sequester does save money and it does cut spending, but it does it in the wrong places, in the wrong way and at the wrong time.

The issue has never been discretionary spending. This is especially true after the almost trillion dollars in cuts put in place with the agreement reached in the summer of 2011.

The issue has always been entitlement spending and how to change the major entitlement programs so that they can be put on a glide path to sustainability, even as they still serve as a necessary safety net for seniors.

The sequester is an arbitrary, non-programmatic approach that will actually retard economic growth in the short run and most likely negatively effect revenues as a result.

Entitlement reform, such as changing the CPI calculation and the process for reimbursing Medicare costs, will actually create economic growth. It will show people that we are willing to address the real problems behind our debt and thus release all sorts of investment and economic activity.

Of course, all these points which have been made by many and which are obvious to most mean nothing if we do not have a government that functions and moves forward with answers and action.

The next few months are what could be called the “big casino” of governing.

The president either steps up and leads or his presidency ends up on a road to nowhere.

The Republican House either joins in with a constructive effort or else people will ask what is its purpose is when they are next on their way to a polling place.

As for the Senate, it just needs to get a nod, not even a verbal expression, from Sen. Harry Reid (D-Nev.) to the senators meeting in the basement that he will give them a pathway to action if they can come up with a bipartisan agreement. They can do this.

The folks are back in Washington. One presumes they came back to do something. Or is that too optimistic?

Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee. He is the CEO of SIFMA, a financial industry lobbying group.