Leon Panetta and Bill Gradison Jr.: Bipartisanship Is Key to Fiscal Responsibility

Leon Panetta and Bill Gradison Jr. are former Members of Congress and a Co-Chair and a Director, respectively, of the Committee for a Responsible Federal Budget. They recent wrote an opinion piece for Newsweek, an excerpt of which is below:

Fiscal responsibility has never been for the faint of heart. It's easy to talk about the need to fix budget deficits and strengthen the economy for the next generation; it's another thing entirely to get the job done.

But Moody's downgrading the U.S. debt provides an immediate reminder that time is running out. We now have all three rating agencies warning about our fiscal situation—no surprises there given that debt as a share of the economy is about to surpass our all-time record, and our nearly $2 trillion annual deficit is larger than spending on defense, Medicaid, and veterans' benefits combined. But our current 10-year plan is nonetheless to add more than another $20 trillion to borrowing and while political leaders may try to ignore these warnings, as seen from whipsawing Treasury markets, our lenders will not.

The run-up in the 10-year yield last month from a recent low of 3.9 percent to 4.6 percent in just a few days was a nasty reminder that while we may have grown used to low interest rates, there is no guarantee that they will stay low. And with a $29 trillion debt, one-third of which will turn over in the next 12 months, higher rates quickly lead to higher interest payments on the debt—already the second largest item in the budget.

Read the entire piece here.

Published works by members or staff of the Committee for a Responsible Federal Budget do not necessarily reflect the views of all members or staff of the Committee.