In a high-ceilinged, gilded room at the Mayflower Hotel, renowned economic minds gathered on Tuesday to discuss the problem of fiscal excess — and the ensuing black hole of debt into which America has been sucked.
Clarity, not to mention consensus, was in limited supply. Panelists, invited by the Peterson-Pew Commission on Budget Reform, disagreed on exactly where to place budgetary blame and how precisely to address America’s deficit(s). All assembled did concur that the budget problem is a dire affair, but said it can’t be addressed until the American people get that.
The problem has gone far beyond just balancing the budget, a concept that is manageable for the average non-economist, and that leaves folks grappling with issues that do not “translate very well across the breakfast table,” said former director of the Congressional Budget Office Robert Reischauer.
David Walker, the president and CEO of the Peterson Foundation, said he believes people do understand the problem — sort of. After attending town hall meetings in 46 states, he said he found that 80 percent of Americans believe addressing the budget is a pressing issue and that two-thirds don’t think Washington is paying enough attention to it.
But while average citizens might know that the word budget should provoke a reaction of concern, knitted eyebrows and possibly some finger-wagging in Congress’ general direction, they don’t understand how to remedy the problems (other than spending less) and have minimal comprehension of what the problems actually are. Medicare, homeland security and other cherished programs are cash-guzzling cows likely to be sacrificed. “The American people today are not remotely prepared for the kind of changes that are necessary,” said public policy veteran Rudolph Penner.
The experts also debated what the debt crisis is — whether it’s primarily a spending problem, a borrowing problem, a growth problem or a revenue problem. They politely argued about whether it’s an issue that should be tackled through health care reform, Social Security reform, congressional reform or tough presidential talk — and whether it’s a crisis that must be addressed for our children’s sake, our standard of living’s sake, the sake of our freedom (from the influence of debt-buying countries), or all of the above.
John Podesta, head of the Center for American Progress and former chief of staff for President Bill Clinton, said that there was plenty of bipartisan agreement on what budget-taming targets should be but little governmental capacity to reach those. Trying to address the long-term and short-term budgetary needs in some unified way is, he said, like trying to steer an aircraft carrier through the Panama Canal.
Douglas Holtz-Eakin, a senior fellow at the Peterson Institute for International Economics and advisor to Sen. John McCain, said constituents and the White House are the bodies who really need to prod Congress toward action. Along with other panelists, he felt President Barack Obama’s efforts so far had been too modest.
In discussing fiscal goals, panelists threw out a lot of years — 2018, 2020, 2025 — that sounded awfully distant. And the implications of the GDP-to-debt ratio are a lot harder for individuals to grasp than a cause-effect relationship they feel immediate connection to, such as the environmental effects of gas consumption.
“Everyone needs to have some shared sacrifice,” Holtz-Eakin said, adding that the American people have to hear a single message 100 times per day before it will penetrate their consciousness. It seems the confusion remains on how to phrase that message, especially as to what that sacrifice should be and what it should be for.