Business Leaders, Former Lawmakers U.S. Deficit Reduction

A bipartisan group of former lawmakers, business leaders and budget experts is urging the U.S. Congress to agree on a plan to cut the government debt.

Tax increases and cuts in entitlement spending are inevitable, members of the Campaign to Fix the Debt said at a Washington news conference today. The group said it would rally centrist voters who are more concerned with reducing the budget deficit than ideological battles over taxes, spending and the size of government.

Neither party, “even after the election, is going to be able to impose its view on the country or other party,” said former Senator Sam Nunn, a Georgia Democrat. “The middle of America is going to have to rally and they’re going to have to support people who are willing to work together.”

Among those joining him were former World Bank President Robert Zoellick, Honeywell Chief Executive Officer David Cote, retired Senator Judd Gregg, former Pennsylvania Governor Ed Rendell and Erskine Bowles, the co-chairman of President Barack Obama’s debt commission.

Lawmakers remain deadlocked over long-delayed budget decisions including the future of the George W. Bush-era income tax cuts that expire Dec. 31, automatic spending cuts set to take effect in January and raising the government’s debt limit.

House Republicans propose extending the tax cuts for all income levels and cutting food stamps, Medicaid, federal workers’ benefits and other programs to avoid reductions in defense spending. Democrats are balking, threatening to go over the so-called fiscal cliff if Republicans don’t allow tax cuts for top earners to expire.

November Election

Most lawmakers want to postpone decisions until after the November election, with both sides predicting voters will strengthen their hand. The nonpartisan Congressional Budget Office has estimated that uncertainty over the budget will subtract a half-percentage point from economic growth this year if Congress doesn’t act.

Former Vice President Dick Cheney met with Senate and House Republicans to urge them to avert across-the-board defense spending cuts scheduled to begin in January.

Gregg of New Hampshire, the former top Republican on the Senate Budget Committee, said he and Bowles met with about 40 senators to discuss deficit-reduction options.

“They were very engaged, they were very interested and they understand some very significant action has to occur so I do think the Senate is quite fertile ground for getting something very substantive done,” Gregg said. Bowles is a Democrat who was White House chief of staff for President Bill Clinton.

“It’s necessary for us to create an environment where it becomes not only good policy to vote ‘yes’ on a debt reduction plan but good politics as well,” said Rendell, a Democrat.

The group hopes to get 10 million Americans to sign a petition urging Congress to act, Bowles said.

Members of the group challenged policymakers to work out a major debt deal by July 4, 2013, saying whoever is elected in November won’t be able to avoid the issue.

“The next president is going to have, without question, a massive fiscal crisis if this issue isn’t addressed in his term,” Gregg said.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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