Leading financial experts Thursday told Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., and Ranking Member Susan Collins, R-Me., that the only way Congress can tackle the nation’s growing $12 trillion debt is through a statutorily-created, bipartisan commission.
At a hearing entitled, “Safeguarding the American Dream: Prospects for our Economic Future and Proposals to Secure It,” witnesses urged creation of a commission whose recommendations would be put on a legislative fast track and would not be subject to amendment by Congress.
“The American people have reached a tipping point on this,” Lieberman said. “They see that we in Washington are incapable of dealing with the debt, ultimately because we are irresponsible. We like to spend and we don’t like to raise taxes. You don’t have to be Alan Greenspan to know that that will lead to an unsustainable debt…
“If we continue adding to the debt without putting in place meaningful measures to pay it back, we put at risk both our economic and national security; we place our nation’s economy at the mercies of foreign creditors who don’t always share our values; and we put in jeopardy generational promises we have made to ourselves and our children, like Medicare and Social Security.”
Senator Collins said: “We cannot continue business as usual. This is the moment in history in which we must confront the conflict between what we want and what we can afford. It is time to reassess our national priorities, to make the hard decisions, and to set a new course.
“The budget reform proposals presented by our Senate colleagues would begin to move us forward as a nation in facing our fiscal challenges.”
During the hearing, Senator Collins asked witness David Walker, former Comptroller General of the United States, about the irony of the day’s hearing, saying: “I cannot help but observe the irony that we are having this debate about what to do with the unsustainable debt load of this country at a time that we are debating on the Senate floor a huge health care bill that is in essence creating a new entitlement program that has enormous consequences for our future budgets... and that could actually drive national health care spending up, not down.” Walker agreed with Senator Collins’ assessment, saying: “It is somewhat ironic.” The core issue is rising health care costs, he said. “The one thing that could bankrupt America is health care costs and we’re not doing enough to really truly be able to reduce health care costs as well as the rate of increase,” said Walker.
Lieberman has joined with Senator Voinovich, R-Ohio, in introducing legislation – the SAFE Commission Act of 2009, S. 1056 -- to get a handle on the growing debt. Senate Budget Committee Chairman Kent Conrad, D-N.D., and Ranking Member Judd Gregg, R-N.H. – both of whom testified at the hearing -- have introduced a similar proposal, the Bipartisan Task Force for Responsible Fiscal Action Act of 2009, S. 2853, which Lieberman and Voinovich have co-sponsored.
Former Federal Reserve Chairman Alan Greenspan testified that expanded prosperity is finite and cannot be counted on to reduce the debt. For that reason, both commission proposals would require that all possible measures be considered – including raising taxes and fees, cutting loans and subsidies, and reigning in discretionary spending and entitlement programs, such as Medicare and Social Security.
Lieberman, Conrad, and others have vowed to oppose a long-term increase in the nation’s debt limit unless a special commission is created to bring the debt under control. The Senate is expected to vote this week or next on the short-term debt limit increase the House has already passed.
Witnesses at the hearing also included Walker, who now heads the Peter G. Peterson Foundation. The foundation estimates that in addition to the more than $12 trillion in debt, the nation’s unfunded liabilities related to pension obligations, Medicare, and Social Security exceed $40 trillion or almost $500,000 per American household.