Deficit Hawks Get Fiscy

TV stars have the Emmys, athletes have the ESPYs, now budget wonks have a major award to call their own.

Wednesday night was a big night for the fiscal policy crowd as the inaugural FI$CY Awards brought together DC A-listers like former Federal Reserve Chairman Alan Greenspan at Washington’s beautiful Newseum to honor a bipartisan group of policymakers who led on confronting our fiscal challenges last year. While the gala won’t be confused with the Oscars, it provided an opportunity for those battling in the budget trenches to celebrate the prominence of the issue and the hope that real action can occur this year.

Governor Mitch Daniels (R-IN), Senator Kent Conrad (D-ND), and Representative Paul Ryan (R-WI) were the night’s honorees. In presenting the award to Senator Conrad, CRFB President Maya MacGuineas stated that the awards are meant to recognize those who are willing to get specific about how to improve our fiscal outlook and work in a bipartisan way.

In their acceptance speeches the awardees discussed the importance of the issue and of acting soon. Conrad noted that everyone is for deficit reduction until you actually start doing it and that a lot of people still don’t think that tough decisions will be required, which is why bipartisan collaboration will be necessary. He praised the work of the Bowles-Simpson Fiscal Commission, of which he was a member, saying that it showed that long-term deficit reduction need not thwart economic recovery in the short term. He also mentioned the need for tax reform and that Social Security reform will be required to ensure its long-term solvency. Conrad also said that those who criticize the commission for threatening entitlements are themselves endangering the programs by not helping to ensure their sustainability.

Governor Daniels stressed that economic growth must complement fiscal discipline. He noted that he could support a tax system that generates more revenue, stating that he was “for almost anything that makes the math work” but that we must be careful not to constrain growth. Daniels also said that Americans will have the courage to support required actions if leaders have the courage to recommend them, noting that most Americans are now being more responsible with their own budgets.

Congressman Ryan said he hoped that someday the award would be irrelevant because the fiscal problems will be solved.

In a panel discussion after the awards were presented (remember this is a DC awards ceremony, instead of glitzy after parties we do panel discussions) budget and finance experts remarked on the financial landscape. John Burbank, founder and chief investment officer of Passport Capital LLC, imagined a challenging scenario where oil prices and interest rates rose. Combined with the aging of America, those circumstances could trigger a financial crisis. Former U.S. Comptroller General David Walker said we need reforms along the lines of those recommended by the Peterson-Pew Commission on Budget Reform. And Maya MacGuineas contended that the impending vote to raise the debt ceiling should spur action to devise a fiscal plan in advance.

The event and award highlight the importance of fiscal responsibility and the need for leadership. Here’s hoping we can celebrate some big achievements next year.