The Foundry

Today in Washington, the Bipartisan Policy Center (BPC) launched its new Debt Reduction Task Force, chaired by former Sen. Pete Domenici (R-NM) and former OMB director and CBO director Dr. Alice Rivlin.

The task force will aggressively address the abysmal fiscal outlook of the United States economy due to government spending. As Domenici and Rivlin displayed, the amount of debt held by the public is set to reach 100% of Gross Domestic Product (GDP) by 2019. Under the same trajectory, the debt would reach 400% of GDP by 2049. As Rivlin pointed out, however, this outlook is completely unrealistic. Far before the debt reached such gargantuan proportions, lenders would refuse to continue purchasing our debt and the United States would find itself in economic ruin.

According to Sen. Domenici, “America has the worst economic future that we have ever had.” This sentiment was echoed by former Senator Tom Daschle (D-SD), one of the founders of the BPC, who explained that following the current path, the nation could see basic needs of society pushed aside to make way for out-of-control entitlement spending.

The Debt Reduction Task Force will address this spending crisis. The task force includes representatives from all parts of the community and from across the political spectrum. What makes the BPC’s task force unique, however, is its commitment to go further than vague suggestions to lower the deficit and control spending—rather, it will create a specific plan for a long-term budget.

Sen. Domenici and Dr. Rivlin stressed that all measures for reducing the public debt will be on the table when the task force begins its mission. This will include options that may be unfavorable to both Democrats and Republicans. Even Sen. Domenici referenced tax increases, saying they might have to accompany requisite spending reductions to decrease the nation’s debt, which will make it difficult to bring many conservatives on board. But, both he and Ms. Rivlin also emphasized that the task force would not be recommending spending cuts or tax increases that could undermine the economy’s recovery and job creation. Instead, they said, the Task Force will propose long-range policy changes.

To get spending under control, the Task Force will have to focus heavily on reforming Medicare, Medicaid, and Social Security, the three entitlement programs which devour revenues. And though most conservatives equate “raising revenue” to tax hikes and consequently oppose such measures, this would not necessarily have to be the case. The Task force could create revenue in other ways, as is exemplified by the Cooper-Wolfe SAFE Act (H.R. 1557). This bipartisan commission would consider reforms that make United States tax laws more efficient and more conducive to encouraging economic growth.

When asked about the political palatability of a proposal that could include provisions unpopular among both Democrats and Republicans, Domenici and Rivlin stressed that Americans will need to be understanding of the severity of the situation, and that its solution might require them to sacrifice. The only other option is to wait to act until crisis is imminent and the power and strength of America has already deteriorated.

The Task force’s goal is to show that solutions can be forged by working together – before a crisis hits. Regrettably, Congress for many years has proven incapable of addressing the autopilot growth of federal entitlements. As Dr. Rivlin explained, one of the reasons the current Congress is incapable of tackling this problem is the newly-developed viciousness of partisanship in Washington. To Rivlin, the biggest threat to the economy is the federal spending trajectory—and the biggest threat to fixing it is partisanship. It’s unfortunate that everyone but Congress seems to be coming up with solutions.