We are on a collision course with financial calamity. A first-time-ever failure to extend the federal debt limit would lead to higher interest rates not only for the U.S. government, but also for every business, home, car, student and personal loan in America. The looming debt ceiling — and the ongoing government shutdown — is causing harmful uncertainty around the world and here at home.
But there is a way out.
Here are the common elements:
• Extend the debt limit for at least one year, preferably two, without condition. That aligns with Obama’s position that we not negotiate on the debt limit.
• Do the negotiating within the context of a continuing resolution to fund the government and end the shutdown.
• Agree to the Republican funding level of $988 billion for this fiscal year.
• Agree on a process for individual and corporate tax reform next year. The goal should be to reduce rates and raise additional revenue to go toward deficit reduction. A reasonable goal would be $300 billion to $400 billion in additional revenue over the next 10 years.
• Agree to additional savings in Medicare and other healthcare accounts by better coordinating care, especially of the chronically ill. A reasonable target would be $300 billion to $400 billion over the next 10 years.
• Take the savings from numbers 4 and 5 above and use them to cut in half the effects of the sequester.
• Adopt “chained CPI” as a more accurate measure of inflation that both reduces spending and raises revenue. The combined effect is a savings of about $250 billion over the next 10 years
• Repeal the medical device tax of 2.3 percent, about which no one seems enthusiastic.
•Name a commission to reform Social Security to ensure its long-term solvency. The longer we wait, the more draconian the solutions will have to be.
Of course, neither party would be completely happy with all of these proposals. However, it’s not really a “bargain” if neither side has to give up things on its wish list.
We can do this. We can end the shutdown, resolve our debt crisis and put America back on a more sustainable course for the future. Let’s do it!
Conrad served as senator from North Dakota from 1987-2013. For 12 years he was the chairman or the ranking member of the Budget Committee.