Event Recap: The 2013 Fiscal Summit
Today, the Peter G. Peterson Foundation held its third annual Fiscal Summit, assembling a number of prominent current and former lawmakers, experts, and commentators to discuss the current state and future of our economy and the nation's finances. The discussion was kicked off by Juan Enriquez, co-founder of Synthetic Genomics Inc., a biotechnology company. Enriquez described some of the recent technological advances and how the federal budget relates to advancements in technology, suggesting that growing entitlement spending could "crowd out" important investments.
The relationship between our budget and technological progress was further explored by former President Bill Clinton and Microsoft founder Bill Gates. Clinton argued the sequester is a perfect example of the problem of "kicking the can down the road" - in order to prevent FAA delays, we have cut investment in our regional air service. "When we kick the can down road, we favor the present over the future," Clinton said. Gates agreed sequestration didn't reflect the nation's values and argued that the discussion should turn to health care, a long-term driver of the nation's deficits. Clinton agreed that health care needed to be the focus, emphasizing the benefits of switching from a fee-for-service system to one that rewards quality of care and the need to put health care spending in a budget.
Clinton spoke favorably of the new Simpson-Bowles plan, in particular that it would delay much of the deficit reduction until after 2015, giving the economy more time to recover. On fiscal policy, Clinton argued that Paul Krugman was right on the short-term and Pete Peterson was right on the long-term. As we've said before, there are ways to follow both of those approaches. Clinton also called on policymakers to turn the conversation from politics to the "grimy details." He said: "What matters is if what you do turns your good intentions into good choices."
Next were interviews with key policymakers involved in current budget negotiations, which included Senate Budget Committee Chair Patty Murray (D-WA), House Budget Committee Chair Paul Ryan (R-WI), former OMB director and Senator Rob Portman (R-OH), Director of the National Economic Council Gene Sperling, and House Budget Committee Ranking Member Chris Van Hollen (R-MD). While there were disagreements about how to move the country forward, all believed that both sides had to come together with a compromise after the experience of the last few years. As Murray put it, "The American people are tired of Congress managing by crisis."
Some room for potential common ground could be seen, particularly on tax reform. Both Ryan and Portman emphasized as a possible source of faster economic growth, though there was division on the amount of revenue that should be raised. When asked which entitlement proposal in the President's budget Van Hollen would be able to accept, he said that he would consider greater means-testing in Medicare. Ryan agreed that means-testing was an option that could become part of a bipartisan compromise.
Janet Murguria of La Raza, David Brooks of the New York Times, Chairman of the House Democratic Caucus Xavier Becerra (D-CA), and House Chief Deputy Whip Peter Roskam (R-IL) then discussed the future of Medicare and Social Security. The panelists disagreed about the nature and severity of the fiscal challenges facing the social safety net, but all four agreed that we must work toward a bipartisan agreement that lets us live within our means and invest in the priorities that will drive future innovation. Brooks suggested that the path to such a balanced compromise would be to have Republicans offer short-term stimulative discretionary spending increases in exchange for long-term structural entitlement reforms from the Democrats.
In the next panel, Susan Dentzer of the Robert Wood Johnson Foundation, Mark McClellan of the Brookings Institution, and Harvey Feinberg of the Institute of Medicine presented on the rising cost of health care. The panelists praised the progress that we have made since the Affordable Care Act in beginning to move away from fee-for-service pay model and spent quite a bit of time talking about the value of getting patients more involved in the decision-making process when it comes to treatment options. Dentzer summed up the consensus of the discussion -- if consumers have to pay more for health care, they demand less of it. If they are involved in the decision making process and are better informed about their health care, they tend to choose to avoid the expensive or unproven services.
The summit's final panel, made up of Admiral Mike Mullen, Governor Martin O'Malley (D-MD), and former California Senate candidate Carly Fiorina, focused on two issues: education and national security. All three panelists praised Teach for America as an effective model for encouraging the brightest Americans to become teachers, and Governor O’Malley argued for an educational model built around reforms suggested by educators. On national security, Admiral Mullen argued that we can afford to reduce the amount the Pentagon is spending, but we can’t afford to cut spending foolishly with the sequester.
Overall, the 2013 Fiscal Summit highlighted many different perspectives on our economic and budgetary. Most importantly, it was a reminder that while the budget debate in Washington may seem frustrating at times, there's still a lot of potential for compromise on a long term solution to put our debt on a sustainable path.