As I continue to travel the country and engage the American people with the facts, the truth and the tough choices that we face to put our nation’s finances in order, Americans are amazed that our elected officials don’t seem to get the need to focus on the forces that are the real drivers behind the huge structural deficits and mounting debt burdens that lie ahead. These include demographic trends, mounting interest costs, unrealistic healthcare commitments and a growing gap between projected revenues and expenditures over time.
Chairman Ryan is correct that our budget problem is primarily a spending one and that the solutions designed to put our nation on a more prudent and sustainable fiscal path should be heavily weighted towards spending cuts and constraint.
However, contrary to Chairman Ryan’s proposal, additional defense cuts that do not compromise national security and comprehensive tax reform that raises revenue above historical averages also need to be on the table in order to ensure bipartisan support for any comprehensive fiscal reform proposal.
Our current fiscal policy and path is both irresponsible and morally reprehensible. At the same time, the manner in which we address this challenge also raises important moral questions. Therefore, I look forward to seeing Senate Budget Committee Chairman Kent Conrad’s (D-N.D.) fiscal 2012 budget proposal and the results of the efforts of the Senate’s Group of Six, of which he is a member.
As the Congress continues to work on fiscal issues, President Obama needs to get in the game and provide much-needed leadership to help ensure that some meaningful progress is made this year on our structural deficit challenge. In this regard, the upcoming debt ceiling debate is the best opportunity to do something concrete in connection with the structural deficits that represent the true threat to our collective future.
One possible approach would be to learn from history and reimpose tough statutory budget controls with automatic enforcement mechanisms beginning in 2013. We need to impose specific debt/GDP targets for each fiscal year that will force the Congress and the president to address mandatory and security spending as well as the need for comprehensive tax reform that must be addressed to restore fiscal sanity and ensure sustainability.
These must include automatic enforcement mechanisms that would be triggered if the targets are not met — for example, automatic discretionary spending cuts, automatic freezes of indexing and any additional subsidies for mandatory direct and indirect spending programs, and temporary tax surcharges based on an agreed-upon ratio to make up any gap that might exist. Importantly, the above enforcement mechanism would only serve as a default in the event that the Congress and the president failed to agree on specific actions needed to hit the annual target.
It’s time for Washington to wake up and face the facts. The U.S. is not exempt from the laws of prudent finance. A debt crisis can and will happen here if we don’t change our fiscal course soon. We need leadership, not laggardship, from Washington. I hope and pray that we will get some real bipartisan leadership soon.
Walker is founder and CEO of the Comeback America Initiative, and former Comptroller General of the United States.