U.S. Senator Mark Warner placed the odds for a bipartisan debt-reduction deal at better than 50-50, and outlined plans to roll out fresh ideas in the coming weeks on where to find the revenue to finance it.
Warner, a first-term Democrat who has been a leading participant in several unsuccessful bipartisan efforts to forge agreement on slicing the U.S. debt through a combination of spending cuts and revenue increases, said at a Bloomberg Breakfast in Washington today that he is in a “period of optimism” about the chances of doing so now.
“This is eminently doable,” Warner said of a package that would cut $2 trillion from the long-term debt. Without offering specifics, Warner said he was looking at ways to raise the revenue that would be needed for such a proposal as an alternative to rewriting the tax code -- which has been the chief means of doing so in deficit negotiations thus far.
“I’m not ready to come fully clean yet,” said Warner, adding later that he was in the process of sharing his ideas with Republican lawmakers and think tanks to determine his proposal’s prospects and when to unveil it.
“Are there other default mechanisms, if tax reform doesn’t get there, that could be broad-based, fair, progressive, and that might attract attention?” he said.
Warner, who co-founded a company that is now part of Overland Park, Kansas-based Sprint Nextel Corp. and served as Virginia’s governor from 2002 to 2006, said lawmakers may be more inclined to strike a deal because “looking stupid at some point has got to motivate people.”
Still, he added, doing so would require both sides to save face in the stalemate, perhaps by embracing some fresh mechanisms for raising revenue that neither side has rejected in past negotiations.
“The validity of some good, new ideas in this debate are important, but equally important is just the idea of having some new ideas, so that people can get off their well-established positions,” he said.
Illinois Senator Dick Durbin, the No. 2 Democrat who has also been involved in previous bipartisan debt talks, said earlier this week he thought the chances of a compromise were now less than 50 percent.
Warner criticized House Budget Committee Chairman Paul Ryan’s fiscal blueprint, arguing that the Wisconsin Republican’s proposed cuts to education, infrastructure and research and development spending are misguided from a business perspective.
Republican presidential nominee and co-founder of the private-equity firm Bain Capital LLC Mitt Romney “would never invest in the Paul Ryan business plan for this country,” Warner said. “It is a bad business plan for America. There is no nation in the world that we’re competing against that has as bad a business plan as what he’s laid out.”
Warner also said there is a good chance Congress will complete an immigration rewrite this year, calling negotiations over a low-skilled guest-worker program “the biggest hang-up right now.” He has partnered with Republican Senator Jerry Moran of Kansas on a proposal to create an entrepreneurial visa for high-skilled immigrants, which he called “an easier piece of” the immigration debate that “will help bring in a broader coalition.”
Warner argued in favor of a “narrowly tailored guest-worker program in certain industries,” with a requirement that the immigrants admitted through the program return to their home country after a period of time.
Warner also said Congress should pass this year “meaningful” reform of Fannie Mae and Freddie Mac, the government-sponsored housing finance enterprises, currently under federal conservatorship. He said the timing is right for such changes, before the housing rebound saps momentum for re-evaluating the role of the government in the market.
“For a long time, we’ve been concerned -- do no harm,” Warner said. “We’re now seeing housing come back in a meaningful way, and my fear is, if we don’t act soon, Fannie and Freddie are going to start making so much money that people are going to start to say, ‘OK, we don’t have a problem here anymore.’”