PARTICIPANTS: Sen. Tom Carper & Bonnie Wu; Bill Whipple & Jim Thomen
AGENDA: Open-ended dialog (no "sales pitch") to compare notes on the fiscal problem.
THEME ("time flies") There is a natural tendency to procrastinate about addressing difficult problems. Let’s deal with that tomorrow – next month – after the next election. Meanwhile, the problems grow and become increasingly difficult to solve.
When SAFE got started, the national debt was $5 trillion, or about “$19,000 for every man, woman and child in the U.S.” SAFE newsletter, Spring 1996. The current figures are $21.5 trillion and about $64,000 per person.
And current projections indicate this adverse trend will continue.
This outlook is dismal, and seems clearly unsustainable.
What corrective action, if any, is planned?
Is there any way we could help?
MIDTERM ELECTIONS: In our view, the personal attacks, etc. have been overdone and it would be more productive to focus on policy issues. To this end, SAFE has prepared and posted the following blog entries:
1. Overview & political climate, 8/16/18.
2. Healthcare, 8/27/18
3. Taxes, 9/3/18
4. Renewable energy, 9/10/18
5. Immigration, 9/17/18
6. Deficits & debt, 9/24/18 (posted this morning)
Secure America’s Future Economy, blog 2018. scroll down to desired entry.
#We’ve been following the public sessions of the Joint Select Committee on Budget and Appropriations Process Reform.
#SAFE’s 6/25/18 letter to the 16 JSC members and others drew zero response. Aren’t the members of Congress interested in thoughtful public comments?
#Two more public sessions were held, and now the JSC is apparently working on its report. The testimony of Leon Panetta at the 5th public session was particularly interesting. [Mr. Panetta said elections were always contentious, but that it used to be good politics to bury the hatchet and get on with governing the country between elections. Now, he's not sure that's true any more, and he also isn't clear how to restore the previous status quo.]
#While the JSC may recommend (deadline is Nov. 30) some worthwhile tweaks in the current budget procedures, we don’t envision any breakthroughs. Fundamentally, as many participants attested, the real problem is not with the existing budget process but with the lack of political will to make the existing process work properly.
#It’s difficult to visualize a solution to the fiscal problem without a clear-cut and generally accepted principle. This used to be that the budget was to be balanced every year except in time of war.
#SAFE wrote to the 535 members of Congress on 6/3/13 urging them to balance the budget within three years and thereafter keep it that way. Senator Rand Paul basically agreed with us, but no one else responded and there was no observable change in behavior.
#At this point, with the situation seemingly deteriorating, we would suggest a three-pronged course of action.
1. Cut wasteful discretionary spending and special interest tax breaks, no sacred cows! The Bipartisan Budget Act that was enacted in February did the exact opposite, sanctioning what amounted to a fiscal blowout, with the explicit blessing of Sens. McConnell & Schumer. Where to cut: Start with cost saving opportunities documented by OMB, which to date have been largely ignored, the Prime Cuts inventory of Citizens Against Government Waste, recommendations of the Government Accountability Office, etc.
2. Since government benefit programs like Social Security, Medicare, etc. aren’t subject to normal budget controls, appoint one or more special commissions to review them from stem to stern and recommend corrective actions. For details of the recommended approach, see the next page.
3. Urge the president to assume leadership of the effort to balance the budget, as occurred – with gratifying results - in the second term of the Clinton administration. [Sen. Carper agreed in principle to the need for presidential leadership, e.g., in a couple of years.]
ENTITLEMENT PROGRAMS (E.G., HEALTHCARE):
Cartoon, king addressing his applauding subjects:
•Elect me and I promise you free healthcare.
•Free housing; free clothing.
•And jobs for everybody.
•One of the subjects: What do we need jobs for?
Going for broke, Michael Tanner, 2015 paints a dismal (and in our opinion realistic) picture of the fiscal problem. [Left 2 copies of this book with Bonnie]
Current entitlement programs aren’t affordable, adjustments must be made, delay will only make the adjustments more painful. Tanner suggests two basic approaches:
•Caretaker approach: trim outlays, increase taxes, postpone the day of reckoning). This seems to make up 95% of the conversation about fixing entitlement programs (always later, never now).
•Proactive approach: redesign programs to function better, e.g., give younger workers control over their own savings; convert Medicare into a backup catastrophic insurance program through the use of vouchers, premium support, and the use of personal savings accounts; block grant Medicaid and let the states run their own programs; introduce more choice and competition in GovCare.
NOTE: Sen. Carper had to leave for another appointment, so we didn't get through the entire agenda.. Before departing, Sen Carper told Bonnie to schedule another meeting with us in about six weeks.