Erskine Bowles and Alan Simpson sat down together to unravel the nation’s fiscal situation for The Omni Hotels Tate Lecture Tuesday night.
Bowles, a Democrat, formed multiple financial firms before serving as the administrator of The U.S. Small Business Administration, deputy chief of staff, and chief of staff under President Bill Clinton.
Simpson, a lawyer and Republican, served in the Wyoming House of Representatives, in the U.S. Senate, and on the bipartisan Iraq Study Group.
Bowles and Simpson joined together in 2010 to co-chair the National Commission on Fiscal Responsibility and Reform, and they later co-founded the Campaign to Fix the Debt. They headed up the Simpson-Bowles Commission, which drafted a budget plan that was rejected by the Obama administration.
When Bowles met with the president in a private meeting Obama said he would be “savaged by the left” if he passed it, according to Bowles. The president also said that Republicans would walk away from the budget plan if it had his support, a point that Simpson agreed with.
According to the paie, the country’s economic situation is just as dire as when the commission was formed. Bowles blames his generation for “this fiscal mess.”
“We not only don’t have a long range plan, we don’t have a budget,” Bowles said, calling the country’s “month-to-month budget” as “crazy.”
Bowles highlighted examples of government spending with less than desirable results and said that America can no longer operate on this “standard set of extraordinary measures.”
The sequester particularly irked Bowles, who called it “stupid” at least four times. He said the cuts were “across the board” and mainly in discretionary spending, instead of in the growing entitlement programs as he believed they should have been. Bowles said the best case scenario in the post-sequester fiscal climate was to make smarter cuts in military spending and to create a “few fees that republicans won’t call tax increases.”
America spends the most out of any nation on defense; this country spends more than the next 17 biggest spending countries combined, according to Bowles. When Simpson audited the government on its defense contractors, he was told that there were between 1 million and 10 million contractors and that the “cost is inauditible.”
There are currently 64 Department of Defense schools, and the price per student is more than $50,000, according to Simpson, who contrasted this statistic with the fact that some soldiers in Afghanistan don’t receive hot meals. “Ladies and gentlemen, that is bull****… I hate to be so precise,” he said.
As far as cutting foreign aid as some suggest, Simpson noted that it wouldn’t make a difference as foreign aid makes up only .0036 percent of the federal budget. Two-thirds of the American budget are the big-ticket items like healthcare and other government programs, according to Simpson. These things won’t be fixed until legislators “have skin in the game,” he said.
The duo wants to get rid of all backdoor spending when it comes to taxes — no loopholes, no deductions. “That’s tough talk,” Simpson said. “It’s gonna be very painful.”
Bowles suggested using 96 percent of all tax money to reduce income tax rates, and 4 percent to reduce the deficit, unlike the Ryan budget that puts all money towards reducing income tax rates.
“We don’t want to throw granny over the cliff. We are granny,” Bowles said of Social Security. He and Simpson proposed that the retirement age in 40 years is raised by only one year and is raised again by a single year in 65 years.
When AARP complained about this and said it would be confusing to seniors, Simpson said he responded with, “They have 40 years; they can figure it out.” He recalled that back in his college years when he “thought beer was food,” 15 people payed in for one person in social security. He said the ratio today is 3 to 1.
Simpson recommended that people respond to those not wanting to give up their “precious medicare” or “precious Social Security” by saying that those programs are a, “Terminological inexactitude, you lying son of a b****,” using the phrase meaning a lie coined by Sir Winston Churchill.
Both said that sweeping changes are possible by making a conscious choice about who the public elects. If a member is considering succumbing to pressure by lobbying groups like the AARP or Americans for Tax Reform and “your country needs a patriot instead of a panderer, you shouldn’t be in Congress,” Simpson said.
If things aren’t fixed in the future, Bowles said, “We’ll be the first generation to leave this country worse off than we found it… That’s gotta be unacceptable to every one of you.”
Visit the pair’s website at www.fixthedebt.org and find out more about how to change the way government handles spending at www.thecankicksback.org.