Debt Hawk Alan Simpson on the Work Ahead
Alan K. Simpson seems to be missing that little voice that stops most people from saying everything they think. That means he’s forever making his friends as angry with him as his enemies. A Republican who represented Wyoming in the U.S. Senate from 1979-97, he served as co-chair of President Obama’s federal debt commission, urging fellow conservatives to set aside their opposition to all taxes and liberals to abandon the idea that entitlements can’t be touched. As Congress launches a new bipartisan “super committee” charged with finding more than a trillion dollars in savings—a provision in the just-passed debt deal—BBW asked Simpson to size up their unenviable task.
There’s something every American can do to help the six Democrats and six Republicans who’ll be picked to sit on the new debt-cutting committee in Congress: Pray for them. What an onerous time they have ahead. Oh, they’ll go in there like it’s the first day of school—clean notebooks and brand new pencils—thinking they’re going to squeeze out marvelously clever and inventive new ways to keep the economy from going to hell. But there are no clever and inventive ways to pay down deficits and the debt. We know what we have to do. We just aren’t desperate enough yet to do it.
We will be soon. I’m speaking from experience. I was the co-chairman, along with my friend Democrat Erskine Bowles, of the National Commission on Fiscal Responsibility and Reform. For 10 months we did just what the soon-to-be-named members of the super committee are about to do. We sat in a room with people of good faith, haggling over a compromise that would bring some order to the absurd way our government spends our money. Both sides went into those first meetings all riled up and armed with their clichés, notions they just knew had to be true because they felt them in their bones. It’s all the rickety stuff we’ve heard again and again over the last few weeks: Some of the Republicans were certain the way to do it was only to cut spending and prevent “job killing” revenue increases. Some of the Democrats knew the answer was defense cuts and higher taxes for the wealthy and corporations. How the super committee is going to argue in its first meetings! We’ll see everyone marking his turf.
It took us about three months to trust each other. Then people started to see how puny their “solutions” looked when stacked up against the facts and the math. Our country owes more than $14 trillion. We borrow $3.01 billion every day. We borrow 39¢ for every buck we spend. Anyone who says with a straight face that we are going to get rid of debt like that and not touch revenue, defense spending, Medicaid, Medicare and address the solvency of Social Security is either goofy or a radio talk show host. When Erskine and I agreed to lead the commission, we told ourselves, “We’re doing this for our grandchildren.” Then we saw how quickly the country’s finances were unraveling and it became, “We’re doing this for our children.” Finally, we had to admit, “Who are we kidding? We’re doing this for ourselves.”
The formula we eventually worked out calls for about $4 trillion in savings through a mixture of tax expenditure reform, entitlement reforms, and cuts to government programs. I’ll toss my elongated frame out on a limb and predict the recommendations the super committee ultimately makes will look very similar. It’s not because we’re some great wizards, but because there are only so many ways to do this. It’s why the Senate’s Gang of Six came up with a plan that mirrored ours in many respects. Same for Speaker John Boehner’s and Barack Obama’s ill-fated “Grand Bargain.”
The thing is, these often laughed-at and ignored special commissions or committees—and I’ve sat on a few over the years—usually come up with as good a fix as you’re going to get. A lot of the time, though, people aren’t ready to hear the truth. President Obama shelved our report when it came out, even though he was the one who asked us to write it. He knew he would be torn to shreds politically if he was the first to endorse it. More than 100 people testified before our debt commission—citizens, special interest groups, politicians. It was quite a show. Everyone so earnest, going on and on about how we must tackle this terrible problem. Then came the kicker: “Just whatever you do, don’t even think about touching my stuff.”
Some of the easiest recommendations we made caused the most howling. There are 2.2 million veterans who receive great medical benefits, as they should, from a program called TRICARE. They pay just $470 a year and no co-pay for that insurance, and it covers their spouses and dependents, at a cost of $53 billion a year. Many of these vets are still young and have new careers. Is it too much to ask those who can to pitch in a bit more? Defense Secretary Bob Gates told us, go ahead and try, you’ll get your rear ends chewed off by the vets groups. I’m a veteran myself, and they called me un-American and a rotten S.O.B. Same with Social Security. We proposed to slow the growth of payments over time and to raise the retirement age to 68—starting in 2050. Simply put, we felt those who have more should pay more, and those who have less should pay less. And we proposed changing the cost of living allowance to a more modern formula. Retiree groups shrieked that we were gutting the program and leaving people to starve.
This is the zoo that the super committee is stepping into. They’re supposed to come up with a plan by Thanksgiving, no easy thing. If they’re smart, they’ll go much bigger than the relatively small $1.5 trillion in savings the debt deal tasks them with finding. They have a couple advantages that we didn’t. One is, between our recommendations and those of the Gang of Six and the Boehner-Obama plan, they’ve got a lot of material to work with. Also, if they can’t agree, then cuts kick in automatically. Though this second advantage isn’t really one at all: Those savings won’t be nearly enough to prevent things from getting worse. That’s a big drawback to this whole gimmicky agreement. It solves a political problem, not a fiscal one.
To reach $4 trillion, our solution had more revenue than Republicans wanted. More changes to entitlements than Democrats did. None of us thought our answer was perfect. We held our noses and almost barfed at some of it. But perfection wasn’t the goal. Some Tea Party types (and remember, they are not a party) seem so sure only they know what’s best for all of us. Doesn’t sound like my kind of leadership. I’m a real live, real conservative Republican—check my Senate record—and sometimes I don’t recognize my party. Many conservatives quote Ronald Reagan, saying how he’s their hero. I knew Reagan well. Loved the man and spent a lot of time with him. And you know what? He raised taxes 11 times in his eight years. He did it to make the country run. These bomb throwers take great pride in saying they will never, ever compromise. Reagan was a master of compromise. Read your history, guys and gals. You’re on the wrong side of it.